I have been nominated as one of Chicago’s Most Valuable Blogger’s. If you like and read this blog, please take a minute to vote for me here: VOTE you can revote every 24 hours, do it as often as you possibly can.
I spend most of my time talking SPX on this blog, because it is in many ways the driver of all other option trading that occurs, along with bonds and Eurodollar options. However, I want to point out something that happened in GLD, we saw a 'panic vol spike' intraday as traders rushed to buy premium in the product.
This is the second time we have seen this kind of run in the past few days and when combined with yesterdays GVZ run up points toward GLD having a rough next few days. Today's rough day may have just been the beginning:
I guess we should have known that when GLD out valued SPY that the gig was up. My guess is that this downward trend does not stop until GVZ begins to settle down. Something I would expect to see as GLD continues its slide, but the speed of the slide slows down. I think that could happen around 155 or so. Hopefully then, the volatility will settle, and then the precious metal can climb its way back up toward 200.00 per share in a more logical pattern.
It’s not that I am a long term bear of Gold... I am not, but when we see the commodity explode the way it did, it almost has to shake all of the fools out, much the way SLV did. I would not be shocked if GLD sits around 155-160 once this thing finishes it slide (again much like SLV staying between 35-40). For those looking for a precious metal, the GLD-PPLT trade still looks like a nice winner.
VIX:
Just a quick note, on VIX. It does not look like Option Vol was buying the market rally today. VIX was down but on a strike to strike basis Volatility was mostly up. I am not sure this thing has legs.
Finally: we are looking for smart, high net worth traders to join our L3 Professional Trader's group. Interested in talking to pro's throughout the day, looking to assist in researching new ways to trade, looking for exclusive discounts on everything from analytics to brokerage, and get the best one on one education a trader with portfolio margin can get? Call us (888) Trade-01 or email me mark@optionpit.com to apply for admission.
