OPEX Strikes Again

Futures are up sharply… …as VIX is being crushed in order to provide cover for about $2 trillion in options expiring today. We’ve been seeing this all week, with multiple downturns reversed by late-session assaults on VIX even as earnings and economic data have argued for lower stock prices. Chase this rally at your own … continue reading →

We’re All Canaries

It’s surreal, watching our “leaders” debate how many deaths are acceptable and whether workers and children should be sent back into harm’s way.  Only a few weeks ago, we all agreed upon the need to flatten the pandemic’s curve so we could prevent a surge from overwhelming our medical system. Now, the debate is about … continue reading →

Wuhan Coronavirus: Still Here

In a stunning demonstration of the extent to which algos control the market, ES soared 56.50 points after the World Health Organization declared the Wuhan coronavirus a public health emergency of international concern. While it’s true the press conference felt more like a China tourism promo, the declaration in no way reduced the risk the … continue reading →

FOMC: What Elephant?

Over the last 20 years, we’ve seen two yield curve (2s10s) inversions: essentially all of 2000 and Dec 2005-May 2007.  The inversions themselves posed no issues for equity markets.  It was the dramatic unwinding of those inversions that produced crashes.Eight months ago, we almost had another.  2s10s had fallen to a trend line connecting those … continue reading →