Article By:
Michael J. Kramer
Tuesday, April 30, 2024 11:00 PM EDT
The S&P 500 was down about 1.6% heading into the FOMC meeting and Quarterly Refunding Announcement tomorrow. The VIX 1-Day was up 8.3 points to 18.10, which suggests much of the decline today could have been attributed to hedging activity.
Flip Flopping Like A Politician
It would be interesting to see where the $VIX was during those other instances.
Risk Is Here, What Are You Going To Do?
Ooh, glad I wasn't around today...inverted yield curve jitters again. Nothing new there. $VIX finally hit the "nervous" level. Same old same old, but August illiquidity kicked in and the downside accelerated.
The big money already went light equities before today. the 3 and 10 has been inverted since May. Suddenly the gold argument makes sense. Hindsight.
Nothing we learned today was new. Algorithmic trading doesn't think. It responds. There is nothing fundamental that would rationalize this move aside from the bond market imploding.
So the market move was inverted to the current temperatures this summer. And it will bask in the headlines tonight and steal the weather's thunder. CNBC will do its "MIT" program tonight because fear buys lot of advertising dollars. This move has been brewing for a long time. The US market just caught the world's flu.
A few disillusioned people will forgo the Starbucks tomorrow and begin a new love affair with McDonald's java. And they'll think about calling their broker.
Can't see the mommasitas telling their kids, no school supplies this year, market just blew thru 25,000.
Don't try to out-think a machine. Don't try to make an intelligent move when you don't have all the facts. We're nowhere near the Dec lows. Where's Trump today? Did he say anything?
Don't Invest In Things You Don't Understand
Most "investors" have no business in anything beyond a pass book savings, let alone stocks, let alone options or $VIX.
Mr. 50-Cent VIX Strikes Again
Maybe the $VIX bets ARE the hedge against a long portfolio? That would have to be a whale, eh.?
SPX and VIX Trade In Alignment
It seems like an opportune time to put on portfolio protection with the $VIX so close to all time lows and the market at all time highs. I bought a few $VXX call spreads for next week just because the risk to reward seemed pretty good for a quick trade.