EDC

More fun in the Emerging Markets

 

I won’t call today a turnaround day but it was noteworthy for the selloff that wasn’t.  The 2 min ceasefire in the Gaza strip did not help.  The sideways motion in the Ukraine did not help.  The ok jobs report did get stocks back to even at one point but there is still some sadness in the air.

That sadness has helped propel volatility to 3 month highs in many areas.  The VXEEM is making a near term high this week even when there has not been a whole lot of movement in the EEM with the 20 day realized volatility just hitting the high 13s.

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Gamma sensitive options get pasted for now

It looked real ugly this morning toward noon.  From what I could tell there was enough decent news to push stocks higher pre-open and then the flood gates of selling opened, hitting the momentum stocks particularly hard.  The on again/off again saga of the Russians camping out in the Ukraine is putting the market into a tizzy.  A near term weak market gets downright ugly when the liquidity dries up after countries start shooting at each other.

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