Ukraine

Yet another upside volatility crush

 Boot Camp is comin in Dec!  Stay tuned.

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.

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Beware despots sending in aid

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It is funny I thought the Russians sending in aid a couple of weeks ago was a bit of a smoke screen.  Somehow the Ukrainian rebels got a new leg up.  The situation for them has gotten better since the white “humanitarian aid” trucks went in.  Fast forward to today.

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Is there a second take in TTWO?

Stocks are going to make a closing high today or near it as I write this post and I can’t help but think we would be way higher if Vladimir Putin could make up his mind what he wants to do in the Ukraine.  We know what he wants to do, take a bunch of territory, but the Europeans are still threatening sanctions.  That is keeping the VIX into another elevated close and vol. futures bid.

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Is Russian aid a Trojan horse?

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We all know the story.  Troy is finally sacked by the gift of an enemy-impregnated horse the size of a house.  Browsing through the WSJ online I see an an Orthodox Priest blessing a fleet of aid trucks.  I half think there might be some Spetsnaz Commandos lying in wait in those bad boys.  With the gimpy stock market today I am not the only one.  I am all for Putin giving aid to the hungry but it is still tough to believe.

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Rattling the Sabers

I started trading options as a floor trader in 1991 right about the same time as Gulf War 1.  The runup to the war was characterized by gloom, volatility and really weak stock prices.  I think the Dow was 2300 or so.  Not much has changed in the 24 years since then through several other political crises and GW2.  The one constant has been after the USA goes in and starts shooting, stocks rally and the VIX cracks.  Until today that is, or maybe.

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Where the vol is

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This day kind of reminds me of the anticipation before walking on a trading floor some mornings.  Something is going to happen but you just don’t know what.  The first instinct is to raise the bid in the options a little bit and do some price discovery.  The corporate earnings news and economic data has been pretty good lately so the heeby geebies are not from there.

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Gamma sensitive options get pasted for now

It looked real ugly this morning toward noon.  From what I could tell there was enough decent news to push stocks higher pre-open and then the flood gates of selling opened, hitting the momentum stocks particularly hard.  The on again/off again saga of the Russians camping out in the Ukraine is putting the market into a tizzy.  A near term weak market gets downright ugly when the liquidity dries up after countries start shooting at each other.

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No Weekend decay today

Stocks made a little rally today on the good economic news in the morning.  Much of the early gains went away as the day wore on.  For what seems like the 5th time this week, the VIX cannot hold the lows of the day into the close.  As I write this, with 30 minutes to go today, the sub-14 VIX came and went with the slow deterioration of sentiment.

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They crushed the VIX, right?

Well, like the Greek referendum in 2012, they came, they voted and stocks rallied.  I am talking about the Crimean’s who don’t seem to want anything to do with the rest of Ukraine.  How it all shakes out is a bit of a mystery, but some very select Ukrainians and Russians will not be able to go to their ATM machines anymore when they fly to London or New York.  That message hit loud and clear as both Russian and US stocks rallied back a bit today.

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