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Blog Archives

Are People Voting With Their Feet?

October 3, 2011


Good morning. Quite a week in the market last week, only to have the SPY down less than a point to close at 113.15 (.3%). If you had any positions, it certainly felt a lot different than a flat week, with the range of 112.98 (Mon.) to 119.56 (Tues.), and a huge rally Thursday in the last hour only to be followed by a large sell-off into the close on Friday. The VIX continues to be at very high levels, closing up 1.71 at 42.96 (4.1%). These levels of the VIX, compounded by a fairly pronounced skew going out, surely makes it tempting to try and maintain short premium positions in the weekly SPY options, but those positions (due to amazing intra and inter-day movement) are not for the faint of heart.

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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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What is Happening?

August 8, 2011


Good morning. It is hard to even describe what happened in the market/world last week and the ramifications it may have on the economy and individual wealth going forward. The market had a horrible week, with the SPY down 7.2% to close at 120.08. The volatility index (VIX) closed up 27% on the week to close at 32, a level not seen since June 2010. Maybe even more amazing, since the focus of the week was the impending downgrade of the US credit rating, the 30-year bond was up over 3% on the week to close at almost 132, representing a 30-year yield of 3.8%. 

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A Fine Line

March 14, 2011


Good morning. Despite a rally last Friday (after news of the disaster in Japan) the S&P closed down 1.63 (1.2%) to end a fairly volatile week. The VIX was up 5.3% to close at 20.07. Putting the VIX move into real numbers, we had been doing some long premium spreads in the SPY for those in the PIP program when the price of the weekly at the money straddle (SPY@ 132, the combined price of the 132 call and 132 put) was roughly 1.50 with 4-5 trading days to go.

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State of Denial

January 24, 2011


Good morning. It was somewhat of a mixed week for the market last week, with the SPY down .7% to close at 128.37, the Dow Industrials up .7%, and the Russell down a significant 4.3%. It seemed like the news on Apple (Steve Jobs taking the medical leave, stock down 6.2% on the week) weighed more on the small cap stocks than on the more multi-national Dow stocks. Thrown into that mix was the State visit of the Chinese President and the resultant announcements of purchases of planes from Boeing and equipment from GE and others.

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