term structure

VIX term structure is getting cheap

Another day another rally in the good old USA as America Inc. keeps delivering the goods.  More solid earnings and home start data got us off to another good start today.  Market players are waiting on Yellen to report some lower to stabile rate news, which could  send stocks even higher.  I see that 200 number on the SPY and can’t help but think that is the next round number to cross the line.


charts from : http://www.vixcentral.com/

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We're Going to Need a Bigger Blog.....SHARKENDAR SPREAD!

Ahead of the big premier of Sharknado 2 tonight,  I thought it would be fun to look at a potential trade on Comcast, which owns NBC, which owns SYFY, which is showing Sharknado.  Do not be surprized if this showing ends up being the biggest broadcast in SYFY history.  While SYFY is not a large part of Comcast,  whether it actually has an effect on long term earnings or not doesn't matter.  I think the ratings on the broadcast will be so high that tomorrow CMCSA might get a small bounce.  Regardless,  the term structure is such that I think a sale of bullish front week calls might make some sense.

CMCSA.PNG

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Was VXX invited to the party?

One too many mediocre earnings reports sent stocks swooning coupled with a “tough love” shout by one of the Fed bigwigs.  The simple reason is that stocks have run and the reasons to keep buying them are less compelling.  The big slowdown from the winter deep freeze keeps showing up in company earnings as many folks in the Midwest eastward stayed home and burned fossil fuel.

charts by www.Livevolpro.com

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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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The Term Structure is starting to break

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The Fed surprised no one and is continuing to taper out of their bond buying program.  While the real benefit will be endlessly debated, stocks have had a hard time making a whole lot of headway since the reductions started in earnest in Jan 2014.  The 1-1.5% upside gaps seem to be a thing of the past unless stocks have come of a bottom.

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The Next Internet Craze

Well, maybe not the next internet craze, and no this is not the title of the next Michael Lewis book.  The craze has already come and gone.  I like looking at new products and this KWEB (KraneShares CSI China Internet Trust) is interesting in that it has flown under the radar for a while.  No options trade on it, (hint: CBOE list them!) but the product moves around pretty good.

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Quien Es Mas Macho? NFLX or EEM

So the Friday rout in volatility did not materialize.  Stocks dutifully opened higher with VIX marking lower, and then everything went the other way.  Today the big premiums we saw in VIX futures got chewed up as VIX Apr closed just about flat with the VIX cash.  The VIX line in the sand at 13% is holding much better than Kaddafi’s Line of Death, and seemingly for months longer.

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Someone called the top in the growth stocks

Following up on Friday’s action we did get a little pull back in the index skew today.  VIX is in a touch and most of the vol. ETP’s might be even or down a touch with the market rolling in down .3%.    There still feels like something is brewing out there, but I cannot put my finger on it.  Gold is getting trounced since Ms. Yellen is looking more hawkish than dovish.  Who knew?  T-bonds are still clinging to some near term highs and that always gives me the heeby geebies until the shoe drops.

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This time the Fed ain’t saving you

Thank you to all those who attended our Bear Market Trading seminar. Look for the March Seminar topic coming soon!

The Fed is continuing the modest tapering of bond purchases and thankfully ignoring the machinations in Turkey and Argentina. A stronger statement of course would be that they taper 20 billion instead of 10 billion.  There were some hopes that maybe with stocks lower that they would ride to the rescue.  That did not happen.

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