IV

IV goes into High Orbit

Stocks ended the week in an ugly fashion with the SPX down about 1.25%.  There was enough in the bad sentiment train with Greece, Euro Area deflation, poor GDP and Russia annexing another part of the Ukraine.  Not the stuff of rising markets with earnings only tepid this season.  So far most companies that are reporting are doing better than estimates.  Not 80% to blow it out but just ok.

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Like the Loved FB

One thing I always like to keep an eye on is how 'high fliers' perform in sell offs. In these most recent sell offs 'loved' names like TSLA, AMZN, GPRO, and AAPL have gotten a bit of a smoosh.  One 'loved name' that did exceptionally well in this sell off is FB. While AAPL dipped to 108, and GPRO back to 55,  FB stayed somewhat healthy never breaking 74.

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When Volatility Does Not Tell The Story

Today, the SPX settled down .49 points. This will show up as essentially as a 0 in realized volatility terms as measured by GARCH which is what most brokerage firms use to measure HV.  But does that tell the whole story?

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VIX Might Finally Break

As I look at VIX, I believe it might finally be ready to break.  There are a few historical things that point toward a drop:

1.  We are entering the holidays, always a time when things tend to drop

2.  There are very few economic data points coming out till next friday.

3.  And finally there is this:

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GOOG volatility is cheap

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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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The Hindenburg Omen- Option Pit Style

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From Wiki:  The Hindenburg Omen

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Just a Bit of a VIX Squeeze

Today the SPX finally broke its streak of not closing up or down 1%.  While that is certainly important to note, it is not the most important thing that happened today.  What most important is how flat footed a few trader got caught.  While the S&P moved, the VIX exploded.  The VIX moved from the low 11's to almost 15% in one day, in what turned out to be an exceptionally short period of time.

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TWTR volatility gets whacked as bad as the stock

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For a brief second today stocks were starting to look good.  It was better than a second, it was more like most of the morning into early afternoon, then the sadness came.  Sadness came to TWTR on Tuesday and there was a bit of a let up today.

Note that vol. across the term structure got savaged by the close today.  IV in June traded into the 50 handle and near term IV was down 15 points.  What does that mean?  Most likely there will not be a parabolic bounce in the stock.

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Putin' on the Vol

Don't miss our Saturday class in March- How to sell puts in an ugly market.

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