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.
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.
It seems since the August Flash Crash this is the cheapest volatility has gotten since before that time. When I look at a vol chart it seems there is this year and last year. When I look at BAC it is no exception. There was last year’s IV and this year’s IV and now we have very low IV going into earnings. I read this as the market expects little out of this earnings cycle. Except someone forgot to tell the equity markets as they have raced to new highs.
Stocks got a little lift today on what I do not know. Draghi made some veiled references but for the most part the Euro kept up it's inexorable climb along with the JPN YEN holding up at year highs. Who would have thought the dollar would be in the tank and the two most troubled trading blocks enjoy bouncy currencies. Dollar weakness should equal gold strength and we did not see that today. The 1 day hold in GLD killed the momentum and the IV.