If you felt like nothing happened in the stock market in August, you are basically right. The S&P 500 had the lowest range in 50 years and ended the month off by just 3 points. And while many were thinking that last Friday’s Fed meeting and this morning’s job numbers might shock the market into action… they were wrong.

The S&P 500 is currently up 6 points to 2177. That puts it right within Monday’s range. It also sees the 20-day historical volatility for the SPX down to 4.6 percent. The VIX has dropped 8 percent today to 12.4 with the VXST, the 9-day Volatility Index, back down below 10 to 9.74.

Many of our traders started out on Monday with a neutral outlook at the start of this week, while a few more shifted to being bearish. And as we close out the week, we are within that Monday range and below the close of that day, though just barely.

Now many of them are looking to the upside. The Labor Day weekend typically marks the end of the summer holiday for trading, so volume – and volatility – should begin to normalize. And

Chris is looking for that upside in the Dow Jones Transportation Index, which he thinks is “on the verge of a big breakout to the upside” so he is buying stocks there. He is not thrilled with the SPX, however, and is selling long dated Iron Flys there.

Carolyn  has shifted back to bullish as well, looking for the S&P 500 to climb to 2200.

David is bullish. “The pattern down from the August 15th high in the S&P 500 bears classic elements of corrective price action and this argues for higher prices”.

Tony, on the other hand, remains bearish over the short term. “Continued weakness in the bond market will lead to lower indices prices next week”.

While I said a couple of weeks ago, right now is a pretty good time to be long volatility. Volatility levels are very low and are mean-reverting. That being said, one should be choosy. The VIX is low, but more than double the actual volatility of the market. The VIX futures, which are the backbone of the tradable VIX products, are even higher, with the October futures up at 16.4. But using long calls to replace stock exposure, or using puts to get some relatively inexpensive downside exposure likely makes good sense given these markets.

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This article was written by Simpler Trading's Editor-in-Chief, Chris McKhann

Chris McKhann has been involved professionally with the stock market for more than 15 years and specifically with derivatives for 12 of those. He started as a stock broker, but quickly moved on to options and futures trading. He spent some time as the Derivatives Product Manager for TD Ameritrade. He was the chief analyst and hedging strategist for OptionMonster. He has been an options trading educator and content provider for many years. His writing and analysis has been featured on Reuters, the Wall Street Journal, Forbes, TheStreet, CNBC and internationally. He has also designed and traded option and futures strategies for prop trading firms and hedge funds as well as managed accounts.