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The market for volatility, the VIX, got a one, two punch for the BOJ and the Fed. They basically said they will do things in the future. BOJ to target rates, possibly less QE and the Fed for a likely Dec and 2017 rate rise. They bought time and they bought space to take out some of the lingering doubts about rates in the mid-term and certainly before the election.
Look for our daily calendar webinar soon! Sep 24th is the day.
As I look at the underwhelming iPhone launch, and my phone, I keep thinking there is an app for everything. There is an app for tides, sports, music and just about anything under the sun. My problem is a I need an app to tell me what to do in a market on Quaaludes; lots of delusion and nothing going anywhere. As there is an app for anything, there are positions for every market condition, even markets punch drunk with Fed indecsion and sound bites.
Stocks are staring at the 2200 SPX level and blinking. Since there is no real impetus to drive things higher buyers are content to sit where they are and wait. For some reason the Yellen at Jackson Hole speech is starting to take on meaning. With a market lacking meaning anything is a reason to move us. Gold and gold related names like the miners are getting hit hardest.
2015 gave us VRX and the corporate perp walk of the year as the CEO got grilled for jacking up the acquired drug prices. Congress gave VRX the smear job and the stock lost 90% at the low earlier this year. My blog of last week talked about VRX and yes it is time to buy juice in there again. That is not my subject. Congress might have a new dog to beat and the name is MYL.
To paraphrase the great Jerry Seinfeld, "It's a market about nothing."
A sample list of 10 day realized vol:
VIX- 60.54 (near 2 year lows)
So the Fed turns a bit hawkish and wants to raise rates. There seems to be the opinion that this fall at some point rates will nudge up. That has done nothing to dampen bonds and prices jumped again. Since we are the only G7 country paying interest I guess higher rates make US Gov bonds more attractive? That also says something about volatility.
We had another day of near all-time highs with banks again leading the charge higher. I think the IV is getting too cheap but that will be a story for the next blog. I think the interesting story is coming out of Turkey. Is it the real story or the non-story that is taking shape on the coup attempt for a NATO member? The ETF that tracks the Turkish (TUR) market was down around 6% today.