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Getting Spun

October 31, 2011


Good morning. It was a huge week for the market last week, with the SPY up 4.63 (3.7%) to close at 128.60. That strong up move was accompanied, as it often is, but an even larger downturn in the option premium levels as defined by the VIX. Those levels, the so-called fear index, were down a whopping 22% on the week to close at 24.53, the lowest close since August 4 of this year. Quite obviously the combination of headline news items associated with the sharp rally were the announced framework of a resolution to the Greek debt issue and some slight increase in the tone of domestic economic reports.

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Geithner and Zombie Banks

September 19, 2011


Good morning. The market was strong every day last week, closing up 4.8% on the week at 121.52. So far in September, historically the weakest month for the market, we have seen the market down strong 3 days, up big one, down 2, and now up 5, all for a net loss of 70 cents in the SPY. Last week’s strong market caused the VIX to drop 19.7% to 30.98, the lowest close since August 3, 2011. Why the sudden optimism, or at least the semi-disappearance of fear in the market (as defined by the VIX Index)?

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Escalating Fear

August 22, 2011


Good morning. It was yet another week of selling in the market, with the SPY finishing at its lowest level since Sep. 17, 2010 at 112.64, down 4% on the week. That number also represents a yearly decline of 10.4%, and at this point (based on Friday’s closing action) the market is not showing much sign of an impending bottom.

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A Smörgåsbord of Issues

July 11, 2011


Good morning. Despite Friday’s surprise poor numbers from the Labor Department the SPY still managed a positive week, closing up .49 at 134.40 (.4%). That small move up maintained the very strong 5.6% move up from the week before, when really the market could have had some serious losses on Friday. The Thursday ADP numbers (private sector jobs) showed a very strong 157,000 advance, causing many to revise estimates of the governmental numbers on Friday to well over 100,000, and had many thinking the surprisingly bad number of May would be revised upward.

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Stimulus Scenarios

May 31, 2011


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Good morning. The market rallied back last week to finish virtually flat, the SPY finishing down .10 to finish at 133.51. That leaves it down 2.1% from the April close of 136.43 with one day to go in May. The market seems to be stalled here (although it is rallying so far this morning) for any number of potential reasons. Other than the employment number for March, which showed a surprising gain in employment, most of the economic numbers have pointed to growth slowing.

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