The Market’s in Downgrade Denial - Here’s What to Do
As we approach the close today, one might have assumed a much bigger response to Moody's downgrade of U.S. debt. We saw the S&P 500 notch a lukewarm 0.13% decline. Historically, though, the response to such downgrades has been much bigger the day of the downgrade and the coming weeks and months after. On August…
Upside Exuberance: From Gamma Squeezes to a Two-Sigma Move
We are closing out the week with some fireworks with markets clocking a two-sigma move to the upside, leaving the expected move in the dust. We were pricing in a 130-handle move in the SPX and got 300. That’s not a rally so much as a mispricing meltdown. It’s upside volatility. This is happening at…
Why the Market’s Stuck (and Why That Won’t Last)
If you’ve been watching the market, particularly volatility and thinking, “Is this thing broken?” you’re not wrong. In April, Trump’s tariffs pushed the VIX top 60 during a flat-out market rout, but just a few weeks later… we’re seeing some of the lowest volatility we’ve had all year. It’s like the market’s stuck in mud.…
Don’t Believe This Calm - It’s All Squeezes and Teases
This market feels calm… and that should scare you. If you’ve been with us for a while, you know that a quiet tape like this often sets the stage for outsized moves, like Monday’s upside explosion. Now, we’re sitting well outside the expected move in the SPX. Probability suggests we’re due for a pullback -…
Don’t Fight the Bull - Embrace It
I can’t blame investors for being skeptical at all. After a six-week stretch like the one we just came through, with its huge swings on the big indexes, the rise and fall… and rise… of critical sectors, and chaotic, near-total uncertainty from day to day, people are feeling punch-drunk. And so when stocks exploded off…
What to Do As the Market Brings a "Pain Trade" Moment
You hear the term "pain trade" thrown around the financial media sometimes. Here's the Cliff's Notes definition: It's the trade that delivers the most pain to the most investors. As the market rallies nearly 3%, it's time for us to reckon with our pain trade. What's going to cause the greatest amount of pain to…
The Market’s Waiting… and Waiting… and Waiting for Tariff Relief
Jerome Powell and the Fed gave us nothing this week - they gave nothing because they know nothing. That left markets with no catalysts; nothing to rally on, nothing to tank on, either. What that looks like is a calm market, but this market isn’t calm… …it’s coiling up. Like a trap. This stagnant S&P…
Not So Fast - Why I’m Still Cautious Despite Market Optimism
The market’s flashing signs of life, and it has been for a few sessions now, but I’m not pushing all my chips in just yet. Yes, the S&P 500 gave us a Bollinger band breakout, and sectors like industrials and financials are leading the charge. Financials, as tracked by the Financial Select Sector SPDR ETF…
The FED Says “Wait and See” - Here’s What I Think
Markets feel broken and disconnected - they have for a long time now. Today just put a fine point on it. The Fed came, they saw… they did absolutely nothing. No rate cut, no real direction, just wait and see. Yet despite that, while J-Po was spinning his nothingburger, the S&P 500s floated higher with…
The Day After Fed Day Is What Really Counts
The FOMC meeting has started, and tomorrow we’ll get minutes, commentary from the Chairman, and - maybe - some fireworks. But as of today, we’re seeing, essentially, backfilling in stocks. The day began with some selling but, as we approach the closing bell, the bulls have come back into the picture. This is all taking…