Volatility Inversion Watch
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The markets start the year with a bang. The FANG stocks that kept the markets a float in 2015 led the way lower today. I also want you to watch the financials very closely. The financials are the second largest market cap to the S&P. All the hallmark signs of volatility is there. What I also want to watch is volatility futures to see if there’s a volatility inversion. A volatility inversion is when the front month volatility futures are higher than the back month volatility futures. Right now the volatility skew is flat.
