Andrew Giovinazzi's blog

Will they or won’t they?

For the most part today was a sleeper.  Most everything sold off after tremendous runs to all –time highs in SPX and NDX yesterday.  You know things are nuts when TWTR, yes I bought more juice in there last week, is the market leader for a day.  Much of the action in VIX this year, when there was any, has been around politics.  DJT seems to keep the volatility around himself and somehow it does not translate to equities except on Russia news snippets.  The month of December has been ruled by Congress and I predict that is how the month will end.

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Bitcoin Mania

At this point there seems to be a lot of ink devoted to Bitcoin.  The 1000% gain this year, the catastrophic drop it might have and last but not least the Bitcoin futures traded on the CBOE and CME.  The last point is really what I want to discuss because we most likely would not have had a financial crisis in 2008 if the OTC derivative market in Sub Prime mortgages was exchange cleared.  Somewhere along the line margin requirement would have gone way, way up which would have started to cool things.

 

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A 9.29 VIX and vol should be cheap everywhere

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.

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Incredible shrunken volatility

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.

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