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Let's hope the rest of 2014 is more exciting

Happy New Year!

2014 started off with a big thud.  I do a radio podcast on The Options Insider Radio Network on Thursdays, and there was some speculation that the sell off was from longs needing to raise money to pay taxes.  All the big names got smacked a bit after posting very good 2013’s.  Conversely, gold is launching probably from an end to tax loss selling.  The government is still in the market….

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Gold ain’t glittering right now

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We are at the end of the year and with all of the big gains in stocks the laggards really stand out.  I don’t know where gold is going the next few months but this year it has taken it on the chin.  Just as it looked like it would rally into the end of the year, the tax loss selling picked up a head of steam forcing gold to price right on the year lows.

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Is the Financial Crisis over?... at least for now the Fed says yes.

Without parsing what the Fed said, they are officially starting to wind down their extraordinary measures.  Maybe Ben pulled the Congressional leaders aside and said “Hey you idiots, I am done and there is nothing more I can do.”  I guess it worked because if we can get sane fiscal policy, things should be ok.

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The FOMC Rope-a-Dope

The market is not moving a whole lot today in anticipation of what the FOMC is going to decide on bond purchases.  I don’t know for sure, but something between a small Taper and no Taper.  With the House and Senate coming up with a medium term spending solution, they can squabble in relative peace trying to accomplish something.  The FOMC has surprised us for a bit and the Rope-a-Dope tactic seems to keep the equity markets pretty buoyant.

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IV Spreads in VIX are Odd

In the last few months we have watched the implied volatitly of VIX options basically implode.  Some would argue that it is a crowded trade.  I would argue that the options are finally finding a normal volatility after trading above an 80% IV for almost 3 years.  That being said, the movement in VIX options in the last few days has been extremely odd.  In the face of a FOMC meeting that many in the market are afraid of tapering and a VIX that is approaching 16 the Jan options have been unable to break 80%.

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