Stock Market Correlations

Stock Market Correlations Stock market correlations are all wrong right now as the market continues to process the Fed announcement from yesterday. Bonds continue to march higher with all the commodities and the stock market. The weaker dollar is driving commodity prices higher. The Fed signaling a reduction in rate increases this year seems to…

Stock and Bond Market Correlation

Stock and Bond Market Correlation The stock and bond market correlation will dictate what happens next. If the bond market explode higher we can see a sell off in the stock market. However, if the bond market breaks down further you could see a bigger move higher in the stock market. Although I remain bearish…

Put Debit Spread Strategy

Put Debit Spread Strategy Today I used a put debit spread strategy in GOOGL. As I mentioned over the weekend I was looking for GOOGL to trade up to 750 today. That is where I want to set up a put debit spread. Let's review specifically what I did if you decide the trade is…

Implied Volatility Expected Move

Implied Volatility Expected Move Every week we need to look at the implied volatility and expected move for the week. Comparing the implied volatility and expected move to the previous week will tell us if there is more risk in the market. For next week the oil production report is coming out and the FOMC…

Volatility is Your Friend

Volatility is Your Friend Volatility is your friend and it's back! Today's market saw more than a 40 point move in the SPX and 100 point move in the NDX from high to low intraday. This sets up some great trading opportunities for us. Today I was able to intraday date FB and QQQ short.…

Risk in the Stock Market

Risk in the Stock Market Do you know what your risk is in the stock market? The way the VVIX is moving is telling us that we are about to make a big move in the market or traders are hedging like crazy. There is a big demand for VIX options. There could be a…

Volatility of Volatility

Volatility of Volatility Looking at volatility of volatility is one way to look under hood of the market to determine what is actually happening. The product symbol is VVIX and what is conveys is the volatility on option prices. By looking at the VVIX we can see that fear is coming back into the market…

Massive Market Divergence

Massive Market Divergence Massive market divergence in today's market action. We saw the FANG stocks - FB, AMZN, NFLX, and GOOGL get clobbered while the rest of the market was relatively stable. Keep in mind these are the 4 stocks that led the market higher. If these stocks aren't leading the way which stocks are…

Short the SPY ETF

Short the SPY ETF You can view your short positions as being short the SPY ETF. Let's review the positions that are on and what to expect next week. There is one big news announcement that is keeping the expected move juiced up in the SPX. That is the ECB announcement as central banks around…

Profit Taking Friday?

Profit Taking Friday Will there be profit taking on Friday? Anything can happen with the unemployment report in the morning, but let's dive into where we are in these markets. In 15 trading day the S&P is up 10% and has come into an important resistance level. You would expect bulls may find this a…