The Balance of Trade
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Scottsdale, AZ, United States
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Market Volatility Bulletin: Realized Volatility Kicks Back Up As SPX Rally Stalls Out
US stocks took a step back from their steady upward trajectory on both Tuesday and Wednesday (May 12-13); futures are down a touch as Thursday sets to open.Europe's new case count is shrinking relative to the global total, even as South America picks up pace.Front months on the VX futures have whipped around quite a bit over the last several sessions. → Read More
Market Volatility Bulletin: Stocks Give Optimism Another Try
US stocks emerged with a winning session on Monday, and are giving green another try in Tuesday's session. The German Constitutional Court has given the ECB thr → Read More
Market Volatility Bulletin: US Stocks Recover Some Ground From Soft Pre-Market Open
European Markets had a rough one; US names are down but faring better.I devote time to comments from readers on their thoughts of recent developments.It is true that May has started off on a bad foot. That said, the partial recovery from a bad pre-market "session" provides some room to accept continued market improvement. → Read More
Market Volatility Bulletin: Risk Factors Merging, Speculation Surging
Crude jumps, and energy names lead the broad indexes higher.Chicken-and-egg scenarios can reinforce short-term returns, but also feed volatility rather than dampening it.Volatility markets are content (or compelled) to test lower levels of implied vol. → Read More
Market Volatility Bulletin: VIX Heads For Low 30s While Stocks Take A Joy Ride
US stocks head higher as the week begins, while spot VIX scurries into the low 30s.We never really get the counterfactual.VX term structure brought low, while spot VIX trades at its bottom going back to early March. → Read More
Market Volatility Bulletin: S&P Dividend Yield Outstrips 10Yr Treasury.Rightfully So
Spot VIX slips while US stocks muddle after a negative showing for most international markets. Stocks do indeed trade with a higher yield (especially with buy-b → Read More
Market Volatility Bulletin: Everything's Great
US indexes take another stab at the recovery thesis, while spot VIX dips back below 40. The read on the economy is dichotomous, and rightfully so: the stakes are large, and we've never really been here before. Term structure on the SVXY is quite flat, giving traders a good amount of flexibility as it concerns picking dates of interest to them. → Read More
Market Volatility Bulletin: The S&P Is Trading Where It Was Twelve Months Ago
US stocks are little changed in the Monday session, continuing a pattern of lower realized vols. Spot VIX is still hugging the 40-handle.Twelve months later and the S&P has basically in place. For a buy-and-hold investor, that amounts to some real return-free risk.While oil prices continue to break down, implied vol on the XLE is calming - dipping below realized vol levels. → Read More
Market Volatility Bulletin: Oil VIX Calming, Even As WTI Plumbs New Lows
US futures boosted shortly after the close on Thursday, and International Markets have motioned sympathetically. Spot VIX is a touch below 40.Primary vs. Secondary Markets - we need to remember which one we're in.Oil VIX calming down even as prices continue their decline. → Read More
Market Volatility Bulletin: Vol Of Vol Takes A Stab At Returning To 'Normal'
Markets are pretty mixed in Thursday morning trade; spot VIX is up marginally. Paying dividends: moral imperative? VVIX is approaching levels that may loosely b → Read More
Market Volatility Bulletin: S&P Futures Indicate A Reversal Of Tuesday's Heady Gains
S&P futures are facing challenging economic data, as well as earnings and slumping oil. Spot VIX > 40 in premarket.Market jargon exists for a reason, but end of day nobody knows how this crisis, and attendant market response, will play out.Large surprises in the economic data may make it a challenge to return to a state of roll decay that favors short-volatility instruments and strategies. → Read More
Market Volatility Bulletin: SKEW Index Suggests Risks Are Still Quite Balanced
Asian markets were mixed, European stocks swung higher, but US equities are giving back some of last week's monster gains.The consumer is a large part of the US economy - putting that block on massive lockdown (literal or figurative) is going to take its toll.S&P skew is inching higher, though the risks still appear quite balanced. → Read More
Market Volatility Bulletin: Easter Bunny Rally In Full Effect
U.S. stocks rampaged higher on a theme of reflation and a reasonably quick return to normalcy.CPI recorded a M/M change of -.4%, the dreaded "deflationary" bogeyman is upon us.Once again, we see a clustering of VX1, Spot VIX, and VIX9D. → Read More
Market Volatility Bulletin: Stocks Are Feeling The Bern
US stocks are pushing higher as the Wednesday session progresses. Spot VIX is in the low-to-mid 40s. Equities are cheering the suspension of the Sanders preside → Read More
Market Volatility Bulletin: Stocks Get A Reprieve With Yet Another 5%+ Up Day
Indexes are screaming higher on hopes that the worst of the world's virus-related issues are behind it. Vol plummets. Policy-makers need to ensure that they do → Read More
MVB: Vol Below 50 As Markets Digest March NFP
Stocks performed well in the immediate aftermath of the NFP figure, and have since drifted lower.As is often the case during a crisis, certain preconceived notions about industry structure may take on renewed importance.VIX, VIX9D, and VX1 are trading very close to one another. → Read More
March NFP: Job Losses Contained To Where We Might Expect To Find Them
Establishment Survey reports 701k job losses, with Household Survey nearly double that figure.The market reaction was largely muted, and one can argue that markets have already absorbed a good deal of the situation we find today over last month's price action.Plenty of room for sizable revisions in light of the circumstances, as well as execution of sampling. → Read More
Market Volatility Bulletin: Markets Steadily Climb As New Week Commences
A reasonably sleepy session in European equities perhaps paved the way for a somewhat more relaxed session for US stocks. Different cultures will take distinct → Read More
Market Volatility Bulletin: VIX Prints 65 As US Stocks Down Around 3.75%
The situation is constantly in flux these days, and spot VIX is hanging in the mid 60s while that state of affairs remains in effect. We really may have hit the → Read More
Market Volatility Bulletin: VIX Trades A Touch Below 60 As Dow Posts Three-Day 20% Gain
US investors followed more in the footsteps of European rather than Asian markets, with strong gains on Thursday.The jobless claims figures were absolutely abysmal; some market analysts are writing off 2020 EPS, while pointing to a sharp recovery.Related markets can and do trade distinctly from one another. → Read More