(11 votes, average: 3.91 out of 5)
Loading ...I guess there goes another one of those market ‘truisms’…because today was more like continuation/staring-at-the-brink Tuesday. But hey, maybe tomorrow we’ll get that turnaround. With everybody and their mother bearish, the stat-heads take the contrarian stance and thus we’re set for another classic showdown.
Quick Personal Note:
My account has a definite bearish bias to it (with 50% cash), but I’m ready to hedge that tomorrow, if needed, with some CIT calls (above $2.15) and MON calls (above $74).
$CPCI:
It was all quiet on the put/call ratio front; no new signals. The SPY Aug’09 88. calls from Monday were sold on the trailing stop a few minutes into today’s action for a measly 3% gain. Better than nothing, I suppose, and it does run the system’s record to 7W,2L, with a 15% yield.
Other Action:
- Quite a bit of call action in NTES on news that they will get to relaunch World of Warcraft. Chinese nerds rejoiced.
- A ton (20k+) of Aug’09 2.50 puts were purchased in HGSI, a biotech lotto name. This stands out a bit, since most previous speculative trades in the name have involved a spread. Of course, somebody could just be augmenting an already existing spread…but the trade at face value looks quite bearish for the stock…
- Along with GS, JPM is set to report earnings next week. Same situation here with low volatility and only a 6% move priced in. Have we really become so complacent about banks?
- AA is ready to kick-off earnings season tomorrow…near-term volatility is high and overall IV% has been trending up the last few days. Based on current premiums a 10% move is expected.
Link of the Day:
Read this article for further proof of how little the $VIX actually has to do with ‘fear’. Every time you hear mumblings that the $VIX is broken, just remember…it’s a VOLATILITY indicator, NOT a fear indicator… Using it as an end-all/be-all market direction indicator, which has led to its recent rise in popularity, can get you into much trouble. (h/t: @SPYder_crusher, aka. Danny)
(I do like that new CSFB Fear Index…sadly, I think you can only access it with a Bloomberg membership, which I do not have. Other sites (I’m looking at you MarketWatch & Y! Finance) need to get their shit in gear and start providing this data.)
Interesting read on the CSFB fear index. Seems easy enough to duplicate. I would think you could get a good approximation but just looking at the relative put/call prices on SPY alone since so many options trade on SPY. I may take a look at it.
CIT?
What’s your question scummy?
Neither CIT nor MON hit my buy points this morning (thankfully), so no hedges were established (nor needed) and my account is thusly sprouting plenty of profits.
@CF:
Yeah, it could be interesting to do a general comparison of SPY vs. $SPX options activity…
They may be pretty similar, despite my tendency to equate SPY with the daytrading/short-term crowd and the $SPX with the institutional hedging and long-term trades…
Hi DPeezy, I may not understand what you wrote up their. I was just wondering, why CIT? Seems, i don’t know, difficult to find the right words…
It seems like messing with FNM at $2.00 or something…
Both CIT and MON were giving me a buy signal above the stated levels. This signal is purely technical, short-term, and very simple (Linear regression + stoch’s). Those 2 just happened to be the only ones giving me that signal yesterday, thus were on the list in case we got a bounce…so I hope nobody even considered buying them.
And it is exactly like messing with FNM…had there been a miracle-bullish bounce, it would’ve been up 10% instead of down…