Blog
What Ever Happened to Mayberry?
November 22, 2010
Good morning. There was conflicting news in the market last week that had the market moving fairly violently on an intraday basis, only to close almost exactly unchanged. The SPY closed up a whole .09, at 120.29, after trading as low as 117.59 on Tuesday. The VIX closed down a solid 12% at 18.04, reflecting confidence that nothing bad will happen in the upcoming Thanksgiving week, or maybe for the rest of the year. Normally that would be the case, quiet trading before and after the holiday, but the recent few years have been anything but normal.
Escalation Clause
November 8, 2010
Good morning. Huge gains for the market last week, with the SPY’s up 3.6% to close at 122.72. This was primarily due to the announcement by the Fed on Wednesday that they were going to peg the so-called quantitative easing (QE II) at around $70B per month to a total of $600B. I think this number is in excess of the “street” number of $500B and I suspect the $70B per month is a little more aggressive than most thought before the announcement.
Politics As Usual
November 1, 2010
Good morning. A very quiet finish to the market last week as the nation prepares to go to the polls this coming Tuesday. Someday someone will explain to me (officially) why elections are not held on a Sunday like in Europe, but I guess the unofficial reason that those in power really do not want big turnouts will suffice. This election, at least in Illinois, has been particularly nasty, with a lot of outside money entering the state (a lot due to the absurd Supreme Court ruling last year) that is virtually untraceable as to its real source.
A Victim of Circumstance
October 18, 2010
Good morning. It was a very interesting week for the market last week, with stocks and bonds heading in different directions. The SPY was up one percent on the week to finish at 117.7, the highest close since May 3 of this year, and within striking distance of the years’ top print of 122.12 on April 26.
Skewed Volatility
October 11, 2010
Good morning. The Federal Reserve gave us another strong market last week, with the SPY up 1.93 (1.7%) to close at 116.54. That is the highest close in the SPY since last May 12. The VIX was down sharply on the week, closing at 20.7 (down 8%), which is the lowest closing since May 3 of this year. Again the investing public appears comfortable with the price of insurance on the market decreasing as the market advances, something that, to me, has always seemed counter-intuitive.