There are two events ahead that could be big stock market movers, Wells Fargo says

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Every strike in the U.S.-China trade war has captivated markets this month, but the options market may be discounting even more big swings coming down the pipeline.

"But, if you look at the options market, they're not pricing in a ton of event risk or event premium around that event," said Chintawongvanich. "The options market is pricing in a lot of volatility in the next one to two weeks which makes sense given we're playing headline pingpong here with the markets with any tweet moving the market up or down."

S&P 500 forward volatility through to May 24 is expected to come in at 19.3, Chintawongvanich said. However, the options market is currently looking for volatility relatively subdued at below 16 in June. That means that options covering that period are comparatively cheap, he said. "A lot of people kind of bought protection when the trade stuff first started flaring up a couple of weeks ago. If you have stuff that's expiring soon … I would suggest definitely look at some of those options and what we call rolling them out, so selling those near-dated options and buying options that expire on July 5. That will capture both the G-20 meetings, June 28 and 29, and the next FOMC meeting.

 

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No sh*t Sherlock... It doesn't take a genius to guess China and Iran

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