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The Volatility of Politics

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.

 

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NDX goes Stink, Stank, Stunk

 

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.

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“Markets so great you can drive a truck through them”

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.

 

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Stocks hate Tax Reform, not

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.

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