Andrew Giovinazzi's blog

Is this the revenge of William Wallace?

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So the Fed is leaning toward 2015 to start raising rates? There is not much different in that announcement as the Fed watchers look to parse all the of the twists and turns in the FOMC meeting minutes.  I think that after this long in our plodding recovery market players would be happy to see the Fed exiting.  That means things should be getting better, but that is just me.

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MBLY could be TWTR redux

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NFP sucked.  The numbers were not great, but surprise, surprise the SPX ended the day up near another record.  The law, in case traders have not been paying attention, is that low interest rates have been good for stocks.  The ECB is lowering rates so that must be good for US stocks.  Ok, anything that happens is good for equities.  The bears might be right eventually if there is anything left of their PA’s when we finally crash.

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Beware despots sending in aid

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It is funny I thought the Russians sending in aid a couple of weeks ago was a bit of a smoke screen.  Somehow the Ukrainian rebels got a new leg up.  The situation for them has gotten better since the white “humanitarian aid” trucks went in.  Fast forward to today.

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Is there a second take in TTWO?

Stocks are going to make a closing high today or near it as I write this post and I can’t help but think we would be way higher if Vladimir Putin could make up his mind what he wants to do in the Ukraine.  We know what he wants to do, take a bunch of territory, but the Europeans are still threatening sanctions.  That is keeping the VIX into another elevated close and vol. futures bid.

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YHOO getting antsy for the BABA IPO

After the record run to all-time highs stocks are stuck today while the violence in the Ukraine continues.  We have highlighted the 5% realized vol in the SPX and will not rehash that but stocks are setting up to go somewhere.  A name that has been setting up to go somewhere is YHOO.

The stake in BABA has really driven the value in YHOO’s shares recently and the name has been in a range from $33 to $38.  It is now at a 3  month high as BABA just released a decent earnings report as it sets to IPO.

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Will the low realized volatility stay with us forever?

I like working at Option Pit with Mark Sebastian and I like our clients.  Well one it is fun, most of time, and we have great clients.   From time to time we get some solid observations from them.  That is another thing I like.  Having a different perspective from traders you have helped educate usually means some interesting stuff know the foundation is solid.  So I am giving one of our clients some props here for this one.  He  knows who he is.

Note that when realized volatility dips below 5% on a short term basis it usually does not stay there for too long.  I have 10 day RV down around 5.41%.  Right now the first 3 Weekly terms in the SPX are all below 9%.

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Volatility on a knife edge

Close but not quite there yet.  SPY traded 199.75 today as the 200 level hangs like the Sword of Damocles over the market.  Everything is feeling good and long equity positions are kicking butt.  In short living the good life like Damocles envisioned.  However, the sword is poised to drop if Janet Yellen cuts the horse hair on rates and down the market drops.  There is some weird tension on that tenuous horse hair of volatility.

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VIX term structure is getting cheap

Another day another rally in the good old USA as America Inc. keeps delivering the goods.  More solid earnings and home start data got us off to another good start today.  Market players are waiting on Yellen to report some lower to stabile rate news, which could  send stocks even higher.  I see that 200 number on the SPY and can’t help but think that is the next round number to cross the line.


charts from : http://www.vixcentral.com/

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LNKD volatility is cheap

Yet another rally on no bad news as stocks love the lack of action overseas.  That was kind of a mouthful.  There is no doubt that the gravity is pulling stocks up overall.  The rally to all-time highs in the face of overseas unrest is just another reason to believe in the rally.  Another reason to believe is the lack of a bid in IV.  The VIX cannot hold a bid for anything even as a near panic hit volatility of Friday morning.  By the end of today it was all forgotten.

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Candy Crush Saga got well… crushed but is it a sweet trade?

Stocks are shaking off just about everything at this point such as Iraq, Iran, Ukraine, Syria and of course that paradise on the Med, the Gaza Strip.  Slow growth in Europe, who cares.  WMT swamped in health care costs, take it up.  Volatility, well just sell the crap out of it.  VIX is now deep into the 12 handle and we might sniff 11% tomorrow.

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