Stocks are struggling today to make it to another record for the S&P 500. As of right now a little push at the end of the day should do it. Without anything news worthy I don’t expect stocks to do a whole lot. A stock that has been doing a lot is BABA.
Alibaba Group Holdings, BABA has been on a tear since mid-October as it held up better than just about everything else with the stuff hit the fan not too long ago. Chinese equities have done ok since then but nothing like BABA. Yesterday was the big Singles Day retail extravaganza and BABA pulled in more of their share.
This is the 3rd or 4th recent record for the S&P 500 as I cannot remember because we have had so many. Stocks are seeing renewed buying interest after the election and for now the wind is at the markets back. There is not much wind in option premiums. All the bears got their time in mid-October and for now that is all they have to hold onto. The bump from the BOJ and ECB has put the kibosh on the bears hopes for now.
“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.
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.
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.
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.