Blog

Big rally so the market defies gravity?

Big rally so the market defies gravity?

 

What a difference a day makes.  The relatively subdued moves yesterday gave way to an explosion after the close when the market decided Big Ben has some teeth left after all.  I will call it his reiteration of a reiteration of Fed policy.  The market liked the way he spoke live as opposed to the dour old minutes they released.  Either way the market loved it.  Did the volatility love it?

Blog Image: 

Will crude keep gushing?

Alcoa has the record today for adding the most market cap to broad market equity prices following just a ho hum earnings report.  With a shortage of news and not much happy going on in Europe the only thing to make the market rally was good old AA.  Did anyone notice the VIX got to near 14% today?  We have to go all the way back to the pre-ending QE days to see a VIX around 14.35.  My guess is if it breaks 14 stocks will have shaken the QE blues away.  Stocks if anything this year have been a poster child for resiliency.  A possible monkey wrench might be t

Blog Image: 

VIX futures get spanked, so what?

There was a little trepidation going into the weekend after the big move up as the SPX was able to notch yet another 1% up day.  At least now good news is good news as more job creation overshadows the negative effects of the Fed slowly rolling out of the bond buying program they created.  When traders look at the equity markets in the USA, the potential pull back by the Fed has not done too much to stock prices.  The volatility is up for sure but overall the equities are shrugging this off.

Blog Image: 

SPX Average True Range Is Elevated

There are plenty of people who do not love GARCH HV measures.  I am one of them.  However, they are still good for showing clear examples of how much the market has been moving.  An even better volatility study though is Average True Range or ATR.  Currently 14 day ATR in the SPX is over 20.  That is SKY HIGH.

SPX.PNG

Blog Image: 

VIX at a floor

The SPX continued to rally today.  While it certainly showed weakness at the end of the day, even if the SPX moves higher, the VIX might not drop anytime soon.  There are two good reasons that won't be happening.

1.   We have Non-Farm Payrolls coming up, those will hold up vols.  Non-farms have become so important with questions of the fed constantly hitting the market.  Depending on the data who knows what the market will do.

Blog Image: 

Two Charts One Story

When we have talked about the movement between SPX and Bond prices correlating in the extremely short term I think we get a really clear picture when we look at this week.  After an abysmal week last week, the Fed has every governor on the planet out trying to push the ten year back below 2.5%.  They have had success as one can see in the 1st chart below which is TLT.

spxtlt.png

LiveVolX (R) www.livevol.com

Blog Image: 

Gold Bugs

We have had 3 Dow 100 point up days in a row and stocks are bouncing like rubber biscuits.  Interest rates priced in the stratosphere?  Not today.  Emerging markets sinking in the sand underneath a cover of woe?  That has subsided.  Gold is on its way to 0?  Just a bunch of hedgies bailing now that inflation has no shot at jumping above 2%.  Who cares about them anyway?  The world felt like it was ending last week and now things seem like they are settling fast.  That is a little too fast for my taste but somehow gold is getting left, in well, the dust.

Blog Image: 

Reading the IV tea leaves for FXI

The GDP gets revised down and we rally.  The bonds rally and stocks rally and gold gets killed.  The deal now is that gold just gets whacked everyday now that inflation seems to be dead.  In our instant macro trading world the dollar has just got much more valuable in gold terms.  The destruction of the dollar, pre-ordained not long ago, is going to be delayed for a little while.  What amazes me after 24 years of market watching is how fast these big picture issues can flip/flop.  I have a suspicion it is funds jumping into similar trades only to hit the ex

Blog Image: 

Pages

Subscribe to RSS - blogs