VIX Volatility Spread (VVS) is Now Open
Guide to Using the VIX Volatility Spread (VVS) We had an open house yesterday at TheoTrade and it was great to have so many people join us. It’s nice to give people a look behind the curtain of what we do. If you participated, you saw Don Kaufman walk through a trading strategy called the…
Worst Day Ever For Regional Bank Stocks
Massive Sector Rotation To Tech & Healthcare Presidential & Senate election caused a massive sector rotation. Premise is that there won’t be a tax hike because the GOP won the Senate, but there won’t be a grand stimulus either. That’s perfect for the long bond and tech. It’s terrible for the banks, cyclicals, and value…
Labor Market Inches Towards Bottom of Financial Crisis
Weak November ADP Report Even if the 3rd COVID-19 wave didn’t happen, we’d be seeing some slowing. The economy can’t grow at a double digit pace and create 1 million jobs per month indefinitely. Obviously, we did have a 3rd wave which means there will be some impact this fall. We just don’t know how bad the…
How SKEW’d is the Market Post-Election?
Post-Election SKEW One of the indices that I follow closely is the Cboe SKEW Index (SKEW). For those that actively trade options, the concept of skew is probably not a foreign concept. However, most people aren’t aware that there’s an index that tracks the level of skew for the S&P 500 Index options. Looking at…
Big Cyclical Election Day Rally
Huge Election Day Rally The stock market rallied hugely on Tuesday which might be given back on Wednesday depending on how the election goes. It seems like the market started to unwind some of the protection put in place a few weeks ago. That unwind doesn’t make sense now that we know the election was…
Why Oil Prices Could Spike
Improved Sales Growth An ongoing thesis in the past month has been that the consumer is bumping along the bottom in terms of RedBook same store sales growth. The consumer isn’t taking a tumble to the negatives. But spending growth isn’t going to go back to the mid to high single digits which is normalcy. …
An Ode to Post-Election Day Volatility
Election Day Trading Opportunities In this morning’s chat with our own Don Kaufman, he outlined a trade to play a potential post-election move in the Financial Select Sector SPDR ETF (NYSEARCA: XLF). As always, he doesn’t talk about it unless he’s willing to trade about it, which he did. In this post, I’m going to…
Monday Reversal: Tech Underperforms Like October
Strong Monday Reversal The stock market reversed course on Monday after having a terrible week. This was an oversold rally. We had a continuation of last Friday in that the tech stocks underperformed and small caps did well. A difference was energy rather than banks had a huge upswing. Investors are betting on a cyclical…
Strong ISM PMI Shocks The Bears
September PCE Inflation Low Again Inflation isn’t a worry in yet another report. September PCE reading showed headline inflation rose from 1.3% to 1.4% which missed estimates for 1.5%. Core PCE inflation was up from 1.4% to 1.5% which missed estimates for 1.7%. While inflation wasn’t an issue in this report, the market is looking…
Fisker, the Oldest New Kid on the EV Block
Fisker Inc (NYSE: FSR) Back in 2012, Tesla and Fisker were two fresh-faced EV car companies bursting onto the scene. However, just like the film Highlander, there could be only one. In the end Tesla went on to EV dominance and Fisker lasted about a year before filing for bankruptcy. The Federal Government lost about…