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VIX MEH Signal Confirmed and Validated

In yesterday's blog we discussed how the VIX was not impressed by this rally.  Today I think its safe to say that the underperformance of the index pretty much confirmed.  VIX correlation to its underlying is one of the best way's to call a pop and this was no different.

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www.vixcentral.com

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VIX Say Meh

The S&P 500 is in what appears another decent sell off.  At the lows today, it was near levels that we saw in the sell offs surounding Greece.  In fact, with another similar drop to today,  the S&P would be right near that recent low close.  Yet, take a look at the option market.  While during the Greek Crisis VIX touched into 20,  This time the VIX has barely touched 16 and does not seem to be a threat to get to 20 with out another bigger push lower.

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Content is King Another CHEAP STRADDLE

So far this earnings cycle we have seen big wins in tech out of GOOG, NFLX, and no AMZN.  Flops have come from AAPL, IBM, and MSFT.  Take a look at the pricing of AMZN from today (now up about double the straddle price).

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Livevol (r) www.livevol.com

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Is it different this time around?

AAPL and MSFT got a black eye tonight on less than stellar earnings reports.  I think that represents around 20% of the market cap of the NDX.  All those that have been calling for the demise of stocks will have reason to cheer today.  Our rally to all-time highs got derailed by something normal like reduced earnings forecasts instead of Greece, QE or some other macro mess.  While financials and tech have powered us to all-time highs, energy, oil and metals are hitting some near term lows.

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Why Are NFLX Traders Always Wrong

NFLX had earnings today and the stock moved 17.00 dollars, rallying past 115.  The straddle was pricing in a move of less than 10 dollars yesterday.  Hey, surprizes happen...however NFLX has outperformed its earings straddle for 4 straight quarters, ever since they started producing their own content.  Take a look:

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www.livevol.com LivevolX (r)

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Market still cares about Greece, sort of.

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The morning looked solid today as stock ran on GOOG, FB and AAPL rallies.  Financials look good as BAC is finally getting out from the constant deluge of fines from the financial crisis.  All was going just fine until reports of unrest in Greece started rumbling through the markets.  Treasuries spiked even into Yellen's hawkish rate tones.  Something happened and it had nothing to do with the USA.

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