Short term volatility trade

During the past few days we've seen the S&P and Dow go through major intraday swings, mostly starting lower and ending near highs. One thing is certain, the Fed has committed to not raising rates in 2015, and they've kicked the can down the road for sometime in 2016. As the market celebrates this news today with the S&P jumping 20 points to over 2,008 -- we think this rally won't last.

Earnings releases start today for Q3, and we see some risk in the numbers which would take some air out of this market. Mainly the risk is coming from a stronger dollar, weaker global economies in China and South America, and a weak recovery in the US as indicated by the latest jobs numbers.

For the next few days we see the S&P taking a break from the recent runup, and we are going to play this trade through the VIX.

We are buying Nov $19 Calls on the VIX for $1.75, and will plan to close this trade at a target above $2.25.