Buy Volatility in the Zombie Markets

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Stocks posted small gains on Friday and remain near record all-time levels heading into the start of earnings season next week. Financial earnings grabbed the headlines and were mixed, but still posted solid returns, led by a jump in regionals. Large cap banks rallied as well as JPM posted solid returns, while BAC and WFC were mixed but rally with jump in bond yields early after economic data sent bonds rolling. Markets are closed on Monday in observance for Martin Luther King Day, but then the earnings floodgate opens, with reports from several banks, and tech companies early next week. Note volatility remains subdued, as it has now been 26 days since the S&P closed with more than a 1% move (12/7). This is what to buy in a zombie market…

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