Blog Archives
New Keynesian Economics
July 26, 2010
Good morning. It was a very strong week for the market last week, despite a sell-off on Wednesday attributed to Federal Reserve Chairman Ben Bernanke’s testimony before Congress. In that testimony before the Senate Banking Committee the Fed Chairman referred to the economic outlook as “unusually uncertain,” and the market responded with a two percent sell-off into the close on Wednesday. The market recovered that amount and more on a big rally Thursday that continued into Friday. For one week, at least, the market focused on generally good earnings, increased revenues, and good guidance going forward, rather than the tepid Economic numbers.
INSANITY
June 14, 2010
Good morning. Snap back week for the market last week, as the market looked at some stronger numbers out of Asia and the run on the Euro subsided somewhat, at least for the moment. The SPY’s finished the week up 2.86 (or 2.7%) to close at 109.68, virtually the same level it closed the Friday before Memorial Day. So we had a fairly violent move to the downside, down to 104.65 last Tuesday, before recovering to slightly higher for the two weeks last Friday. This morning the market looks to extend those gains.
The Bottom Line
June 7, 2010
Good morning. One of the few calendar, or seasonal, type plays in the market that has been most consistent since the early 1980’s (time I started in the trading business) has been the relative lack of volatility in the market from essentially the May options expiration through Memorial Day and even until the 4th of July. When I remember the years when I had 11 traders trading in our group on the floor of the CBOE and how difficult it was to not end up long premium entering a time of holidays, time off, graduations, etc. Not this year, it seems.
This Island Earth
May 10, 2010
Good morning. Wild and down market last week, with the SPY closing down 7.55 (or 6.4%) to close at 111.26. The VIX spiked up 85% to close at 40.95, signifying that the cost to protect positions had risen dramatically, and actually closed Friday night very close to the high. In addition the market had a nightmare day on Thursday, with the markets spiking down and coming virtually unglued for a brief time in the afternoon. Investigations are abounding, and should show that the entire market structure needs to be looked at very strongly and honestly, but I am not holding out any hope for real reform.
Look In The Mirror
May 3, 2010
Good morning. Negative week for the market last week, with the SPY’s finishing down 2.87 to close at 121.73 (2.3%). The VIX had a huge move up of 32%, from 16.62 to 22.05. This followed some sliding markets overseas as mounting concerns of a major China real estate bubble continued, as well as the Central Banks in Europe limping towards a bailout of the debt ridden Greek economy.