Happy New Year to all the Option Pit faithful! We started off with more of what we saw last year; the inability of VIX to hold a spike and then yet another rally. Not so long ago naysayers thought we would never see the highs again in the NASDAQ and yet it pushed through 7000 today for an all-time high. Whatever VIX thought was going to happen, it was right, just not in the direction implied by the sharp rally.
For the most part today was a sleeper. Most everything sold off after tremendous runs to all –time highs in SPX and NDX yesterday. You know things are nuts when TWTR, yes I bought more juice in there last week, is the market leader for a day. Much of the action in VIX this year, when there was any, has been around politics. DJT seems to keep the volatility around himself and somehow it does not translate to equities except on Russia news snippets. The month of December has been ruled by Congress and I predict that is how the month will end.
Stocks are stuck to the vicissitudes of Congress until the recess on Dec 15th. I don’t see how much can propel us higher or to touch the ATH’s we reached earlier on Monday. The nagging bid for Treasuries is a bit disconcerting as well. Today we had the ultimate “What the Hell!” signal out of SPX, meaning VIX down, SPX down.
Fake news, real news, no news, blue news… it appears that we have had a lot of flip flopping and flat out surprises on news stories lately from the failure of the tax bill to the miraculous resurrection of the same. SPX found a way to trade to ATH briefly today but the NDX has not been so fortunate of late. Granted the rally in 2017 has been spectacular for NDX.