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A Tale of Two Vols

Yet we have another all-time high close for SPX with the outlook for equities very bright indeed.  Not so much on the fixed income side which had a massive correction in the last two weeks.  The story is in the IV and here they tell two different things.  The volatility for volatility as measured by the UVXY is near 1 year lows.  That is right with equities clocking in highs vol of vol is in the basement.  This is how it should be.

 

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The First TWTR President

That was quite a week and 2 days.  Before Donald J Trump stunned the media with his election win, he was a power user of TWTR.  Various reports about what he will tweet in the future are unknown to me as I write this but it is safe to say TWTR will keep buzzing with the social media malestorm he helped create. The fact that TWTR is now stuck in the popular culture is pretty hard to dispute.

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Bank stocks are telling a story

There was a bit of a rally today on Fed jawboning and a tepid APD payroll number.  The economy is growing just not as much as anyone would like.  But is it growing enough to raise interest rates? The action in the bank stocks seems to say yes.  VIX was marginally lower but the backdated futures did not move too much.  If the NFP number is going to be a nothing VIX Oct futures should be dropping more but they are not.

 

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The market is on Quaaludes

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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.

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Turning to Dust

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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.

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MYL gets stung

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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.

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VIX gets a smack

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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.

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Is the Dark Time over for VRX?

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Stocks are up .85 in SPX and VIX up to 11.66; that’s right up to 11.66.  So you ask yourself is it 2006 or 2016?  Be that as it may stocks and the market are looking at the second half of 2016 and leaving the front half in the rearview window.  Another stock that would like to leave 2016 in the review window is VRX.  Today VRX was up 25% to 28.16 and it might just be getting started.

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