Complacency, Inflation, and Time for a Hedge
—Inflation in-line but not dead —anemic volume at the end of the quarter —NVDA and tech squeeze full stop —XLK under performs INTC, AAPL, TSLA —correlation higher —financials and energy —watching retail —time to hedge SPX Expected Move -- --last week -- 54.11 (4--day expected move) --next week-- 62.52 (5--day expected move)
These Indicators Signal a Change Coming to the Markets
I’ve been absolutely pounding the table on this for more than a week now. The correlation between Big Tech market leaders and the S&P 500 is getting stronger, not weaker. And that means a correction will be knocking on the door any second now. Higher SKEW and much lower volatility points to that. Low options…
The Fed Just Delivered Some Irrational Exuberance of Its Own
Another Fed Day has come and gone… and what a dud. Not only has the S&P 500 fallen off its daily highs, but - big picture - the central bank has completely failed to curb inflation. That’s despite all the cheerleading they’ve done over the past, I dunno, three years. More to the point, that…
Market Correlation is Causation for Concern
"The correlation between the Big Tech stocks and the rest of the S&P 500 is low, compared to history," says a recently published Barclays note. I kind of agree. The big guys are right once in a while. But the note goes on to say that Big Tech/S&P 500 correlation actually spikes when markets sell…
The Triple Witch Returns...With Trillions in Risk to the Markets
Everything’s got an expiration date - milk, bread, bananas… and derivatives. This Friday - day after tomorrow - we’ll see stock options, index options, and index futures worth trillions all expire on the same trading day. It’s called “triple witching,” and if for some reason you’ve never been through one before, you’re in for a…
Here's Why the Selling Is Different This Time
The indexes took a hit today. The S&P, which had been up nicely to new all time highs surrendered to the red at the end of the day. But saying "stocks are down" is like calling the Pacific Ocean a "puddle." It doesn't do anywhere near enough justice to the insane price action we saw…
The Magnificent Seven are Down to the Final Four
The S&P 500 was enjoying a bit of a bounceback today after yesterday's selloff. Good news, right? Well, not so much. What I was looking at toward the close - and in fact over the past few days - is actually not great news for the market. We just keep seeing more and more weakness…
When the Selling Starts, Markets Could Get Wild
The markets can be the ultimate bandwagon sometimes, and that’s got a tendency to be dangerous. It doesn’t take long for one big, definitive sell order… to be followed by tens of millions of others. At the moment, it’s working the other way; the crowd is into just one or two stocks (which we’ve talked…
These “Magnificent 7” Stocks Just Hit Critical Levels
These stocks have been leading the markets higher and lower for months now, to the exclusion of practically everything else - including hard economic data! (Including PCE, which drops tomorrow.) FOMO-stricken investors and traders are bidding them up to (literally) insane levels. There’s really not much else left to buy… and if there was it’d…
What to Do About This One-Stock Stock Market
I can think of 499 stocks that might as well hang it up... Welcome to the S&P 1, where you can buy any stock you want… so long as it’s Nvidia. Buyers only, though - no sellers allowed. I’m only half-joking. Diversification on the S&P 500 is now severely compromised; it’s more concentrated than it’s…