Andrew Giovinazzi's blog
9.29 VIX and it feels like we are putting the holiday in to the SPX IV already. 9 VIX does put me into a bit of a buying mode so I started going through my list of names that should be at lower IVs over the next 90 days. And low and behold I did not find what I thought I would find.
My best trade idea was early in the week with the SPY/QQQ pair. After talking with Mark we think the big end of year tech rebalance is over so that idea could have some legs as that sector recovers. Congress could still provide some fireworks as Dec 15 looms but nothing is really sinking the market for stocks. Maybe all the volatility is going to Bitcoin (BTC) so that could be a dampener. After all BTC is worth more than WMT so we got that going.
Stocks are stuck to the vicissitudes of Congress until the recess on Dec 15th. I don’t see how much can propel us higher or to touch the ATH’s we reached earlier on Monday. The nagging bid for Treasuries is a bit disconcerting as well. Today we had the ultimate “What the Hell!” signal out of SPX, meaning VIX down, SPX down.
Fake news, real news, no news, blue news… it appears that we have had a lot of flip flopping and flat out surprises on news stories lately from the failure of the tax bill to the miraculous resurrection of the same. SPX found a way to trade to ATH briefly today but the NDX has not been so fortunate of late. Granted the rally in 2017 has been spectacular for NDX.
That was a quote from a Cboe floor broker in 91 or 92. He was referring to a customer reaction to a 1 ¼ 2 ¼ market he transmitted to a customer on a spread from the crowd. As a market maker those wide markets were fun but they did not bring a whole lot of business. The brokers would then “squeeze” the order and bid less, say 1 ¾ knowing a real offer was much closer.
Is this the buy the rumor and sell the news moment? The Tax Bill comes out of committee along party lines, never a good thing, and SPX puts in a respectable 1% gain. The ballistic missile fired by NK? It must be filled with rocks. The only real market risk now is that the Tax Bill does NOT make it to the next leg. The Republicans are desperate for a win so my guess is that they will squeak something through.