Jan 182017
 
February 2017 GDXJ Strangle

Volatility remains low across the board leading up to the presidential inauguration on Friday. However, the VanEck Vectors Junior Gold Miners ETF ($GDXJ) is currently experiencing very high volatility. IV Percentile is above 82% which indicates that the implied volatility has only been higher than its current level 18% of the time in the past year. With so few products that have high implied volatility right now, I decided to place a trade in GDXJ this afternoon. I have not traded this ETF in the past and am just dipping my toe into the water with a very small position.

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Jan 142017
 

Market Conditions

The second week of 2017 ended up, but just barely as financial firms kicked off the fourth quarter earnings season with solid results. The broader market appears to have temporarily run out of steam as the S&P 500 ($SPX) marches towards the 2300 level. And of course, the Dow is still stuck just below the highly anticipated 20,000 mark. This is, however, in contrast to the NASDAQ Composite ($COMP) and the NASDAQ 100 ($NDX) which did end the week at all-time highs. Volatility remains extremely low with the VIX closing at 11.23 which presents real challenges for traders that invoke option selling strategies.

The S&P 500 opened Monday at 2273.59 and closed on Friday at 2274.64, up 1.05 or 0.05% for the week.

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Jul 162016
 

Market Conditions

Up, up, and away! The bull is clearly back. Equities were up for the third week in a row, reaching a series of fresh record highs. The swift post-Brexit rebound has been driven by falling treasury yields (making bonds more expensive compared to stocks), better than expected economic data, and higher expectations for company earnings growth. The U.S. jobs report showed the strongest monthly hiring since last October, monthly retail sales rose sharply with three-month growth now the strongest in more than a year. Rate hike expectations did edge up a little, but concerns about a rate hike taking place before the end of 2016 are almost non-existent. The fed funds futures market estimates the likelihood of a hike in July at 2.4% while the implied probability of a hike in December sits at 47.8%.

The S&P 500 opened Monday at 2131.72 and closed on Friday at 2161.74, up 30.02 or 1.41% for the week.

Chart_071616_SPX

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Jul 022016
 

Market Analysis

Equities recorded their strongest weekly gains of the year following last week’s Brexit debacle. Markets were spurred higher by a vow to further ease monetary policy by the Bank of England during the summer. In the wake of those comments, markets have priced in an 85% chance of a rate cut in England by August. This all puts further pressure on central banks in the United States to keep interest rates low indefinitely. It appears that the zero-percent interest rate policy (ZIRP) is now the “new normal”. The S&P opened Monday at 2031.45 and closed on Friday at 2102.95, up 71.5 points, or 3.52%.

Chart_070216_SPX

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Jun 112016
 

Stocks rallied during the first half of the week marking a new high for 2016. However, the rally was short-lived. The SPX came within 12 points of its historic all-time high on Wednesday, but was unable to continue the upward momentum. On Friday, the market gave in to selling pressure and the SPX closed down on the week.  Investor fear has returned due in part to the World Bank lowering its global GDP forecasts. This report, along with nervousness around the looming “Brexit” vote and the FOMC meeting next week put traders into a risk-off mode before going into the weekend. The S&P 500 opened Monday at 2100.83 and closed on Friday at 2096.07, down 4.76 or 0.23% for the week.

Chart_061016_SPX

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