Andrew Giovinazzi's blog

Risk takes the Weekend off

Using Options to Trade for Direction

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“Learn how to put the odds of trading on your side, learn to profit from options even when you are wrong, and especially when you are right!”

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The gloves are off for OCN

Using Volatility To Trade Direction

“Learn Use Volatility to Put the Wind at Your Trade's Back”

 Stocks ended their 4 day rally today after a lack of new promised stimulation from a Central Bank failed to materialize.  Corporate earnings are getting a bit better into the cycle and even a whiff of inflation today kept a rally going this morning.  For gosh sakes even YHOO posted rising revenue last night.  Without the system shock of QE stocks could not sustain the climb from the bottom.  Getting back to all-time highs will take a bit longer.

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Just another week for the markets

Using Volatility To Trade Direction

“Learn Use Volatility to Put the Wind at Your Trade's Back”

 

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Realized vol show no signs of slowing down

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Using Volatility To Trade Direction

“Learn Use Volatility to Put the Wind at Your Trade's Back

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Did the Fed just do another QE? Or did I miss something?

Maybe it was the Europeans or maybe it was some jitters in China or Africa.  The FOMC suddenly lost it zeal for raising rates.  The economy here has been growing but not enough to satisfy our rate mandarins.  Maybe it is the TWTR/FB world of instant gratification but it takes time to get off the QE band wagon.  The Europeans are  in the tougher boat of restructuring economies since they cannot borrow at the rate they used to so they can pay all the benefits.  It does not look like Super Mario is going to finance that.  Better to have slow or even growth from restructuring than souped up QE.

 

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A new technical pattern emerges intraday- the VIX Grinder

No it is not a tasty sandwich from the Potbelly shop close to the CBOE.  It is a pattern we found in our chat room at the Option Pit.  Yeah, Yeah I know you will say it is a “wedge’ but pox on that.  It kind of reminds me of a sausage grinder.  Meat goes in and sausage gets spit out.  In fact one of our clients came up with that.  VIX kept grinding with the SPY and doing nothing really.

 

LivevolX (r) www.livevol.com

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Something is bubbling under the drillers

Stocks looked ok today until Spain announced they have a case of Ebola in the country. It sounds like a non sequitur but a panic could be bad for mining, airlines and a host of other industries that operate in Africa and transport goods and people.  Never mind that Ebola does not transfer from one person to another easily, but we are talking market sentiment here not rational behavior. 

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INTC IV Looking Big

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Another toxic brew for stocks today as equates drifted down around 1+% for the day.  None of this was really attributable to the numbers.  ADP was ok but the Ebola, HK, Russia, ISIS concoction of market sadness kept sentiment weak.  Note how all the problems are more political than anything else.  They need the will to solve them.  This did drive IV up to some higher levels so those with some dry powder listen up.

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Someone see the Camel that puked on the Euro

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Normally I would not do this.  At Option Pit we pride ourselves on coming up with our own trading ideas so this is a bit of an aberration.  Sure we use client ideas, but heck, they are our clients.  This is one that came up in our Pro Chat and it led to a decent trade idea so I am going to share.

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Is the new VIX level justified?

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It is possible we are back to the days when the NFP numbers mean something.  Stocks are more edgy lately as the intraday volatility picks up.  The 16 VIX right now is justified on the touchy moves over the last 4 or 5 sessions.  The bid for volatility today belies something else.  I see some unrest potenital from PIMCO but I do not think that is it.

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