Market has tried to rally and was sold in a controlled manner during the second part of the yesterday's session. But looking in the details one will remark that risk is starting to enter by a small door. Small caps were clear performers. Commodity currencies were strong as well as East European ones. The implied volatility as well as it expectation (VXX and contracts on VIX) were about unchanged.
As for the moment I'd expect one more close near the recent lows for the broad US indexes as well as for other risk plays (EUR/JPY, EUR/CHF) before we start the summer risk rally.
Showing posts with label VXX. Show all posts
Showing posts with label VXX. Show all posts
Thursday, June 10, 2010
Thursday, October 22, 2009
Missed!
What a pity, the Composite missed the target of 2200 by less than 10 points. Hopefully, FX market gives us a chance to have another attempt before the real correction starts. In fact, USD is still looking like going to spike toward 74. That shall give ~1.52 target for EUR.
The volatility has suffered a powerful reversal following the sell off, but such a thing often needs a retest.
The volatility has suffered a powerful reversal following the sell off, but such a thing often needs a retest.
Thursday, October 15, 2009
Complacency and Confidence
The words associated with Wednesday's session.
The broad indexes are approaching critical levels of resistance, Intel beats the Street and ends near the lowest level of the day, - to say this performance was largely anticipated. The volatility index (VIX) make new lows, showing there really isn't much fear in this market. AlphaTrader has initiated a long position in volatility via VXX with a goal to stabilize the whole portfolio in case, just in case, everything is not that good the market seems to believe.
Silver and Gold were quite disappointing, failing to advance in this risk and inflation friendly environment. Looking at my favorite chart of gold to silver ratio, I find it looks indecisive at the moment.
To complete the pattern, the ratio should go at least to 55, which would give us 20 bucks silver with, say, 1100 bucks gold. In fact, the task is not impossible, given the current weakness in USD which, in my opinion, should shortly land around 74
Will precious metals anticipate the bottoming USD and decline in advance or will we have a spike provoked by the fear of the global inflation. Despite the appearance, this market becomes very tricky. The gold to silver ratio is the thing to watch very closely.
The broad indexes are approaching critical levels of resistance, Intel beats the Street and ends near the lowest level of the day, - to say this performance was largely anticipated. The volatility index (VIX) make new lows, showing there really isn't much fear in this market. AlphaTrader has initiated a long position in volatility via VXX with a goal to stabilize the whole portfolio in case, just in case, everything is not that good the market seems to believe.
Silver and Gold were quite disappointing, failing to advance in this risk and inflation friendly environment. Looking at my favorite chart of gold to silver ratio, I find it looks indecisive at the moment.
Will precious metals anticipate the bottoming USD and decline in advance or will we have a spike provoked by the fear of the global inflation. Despite the appearance, this market becomes very tricky. The gold to silver ratio is the thing to watch very closely.
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