Blog Archives
Mental Midgets and More
March 29, 2010
Good morning. Another quiet week in terms of volatility last week, but again the market did finish with a gain. The SPY was up fractionally again, gaining .61 to close at 116.58. At times, both Thursday and Friday, it looked like there was a chance of a real upside breakout, but late sell-offs dampened the mood. On Thursday, for instance, the SPY traded all the way up to 118.17 before closing near the day’s lows at 116.65. Normally that would be the sign of a tired market, but any attempt at a sell-off seems to be met by buyers below the market (at least so far). The VIX was actually up on the week, although fractionally, closing up .82 to 17.77. If anything, the upward skew in the implied volatility going forward worsened, and it remains significantly more expensive, in terms of implied volatility, to buy far out protective puts than it does to buy anything near term. For example, in AT&T (trading $26.24), the January 25 puts of 2012 are trading for a 23 implied volatility vs. the near term April 26 options at a 15 implied volatility. I am not sure what sort of relative carnage or volatility spike the market is collectively expecting going forward, but it is sure priced in.
Middle America
March 22, 2010
Good morning. Last week the market was up fractionally, with the SPY up .51 to close at 115.97. That is still a spectacular move up from the gloomy days of last March, when on last March 19 the SPY closed at 78.94 (47% increase). It also is an interesting contrast to the VIX, which was down on the week to close at a low number of 16.96. That is down dramatically from the number last March 19 of 43.68 (61% drop).
Asia, Greece and More
February 16, 2010
Good morning. It was a very interesting week for the market last week. The SPY advanced 1.38 (or .9%) on the week to close at 108.66, after actually trading lower on last Friday than the close of the week before. It was actually a fairly impressive rally off the lows last Friday, as the low opening was associated with negative market news from both Europe and Asia.
We have met the enemy and he is us.
November 30, 2009
Good morning, and hopefully everyone had a happy and restful Thanksgiving holiday. The market was mostly positive last week until Friday, the normally sleepy half day after Thanksgiving, when the market reacted to worldwide sell-offs on Thursday due to the impending suspension of interest payments from Dubai World. The SPY was down on Friday from 111.38 to 109.38, or 1.6%, essentially erasing the entire gain of the previous four days, but not nearly as much as the 2-5% drops in other markets around the world.
OK, Here’s the Situation…
November 16, 2009
Good Morning. Another strong week for the major averages, with the SPY closing at 109.62. That is up 2.3% from last Friday’s close of 107.13, and now up a full 63% from the low of last March. The VIX was down 3% on the week, from 24.19 to 23.36. A lot of the rally seems driven, and is for sure being credited for the advance, by the continuing weakness of the dollar. It goes something like this.