Why one strategist is 'bullish but nervous' about the markets

The Dow Jones Industrial Average (^DJI) and S&P 500 (^GSPC) pulled back from their all-time highs on Wednesday. It's another example of the volatility investors have seen in September.  Looking ahead, OptionsPlay Senior Options Strategist Brian Overby is "bullish but nervous" about the markets. He points to what happened after the Federal Reserve cut interest rates by 50 basis points. Stocks closed lower that day, only to soar the next day. Overby thinks what happened was investor focus shifted from inflation to jobs, so "as long as the economy feels we're doing OK on the job front, then the market decides that it wants to set new highs." He cautions, though, "that there is so much volatility in the marketplace, it's kind of hard to decide exactly where the market wants to go," using the CBOE Volatility Index's (^VIX) wild fluctuations as an example of the market's uncertainty.  Watch the video above to hear Overby explain more about VIX seasonality. He also discusses how to play DR Horton (DHI) using options right now. For more expert insight and the latest market action, click here to watch this full episode of Market Domination. This post was written by Stephanie Mikulich.