I won't even try to predict the price of Oil or other Carbon Products. What I would rather do is follow the gobs of money that know better. The Equity Market has been taking its daily drubbing and I wanted to see what was running counter to the market trend.
Effects of a Wells Letter on stock
There is so much talk about inflation and printing money that it seems a foregone conclusion. Gold is near its all time highs. The conventional wisdom on this is pretty set in stone. Commodity prices will skyrocket again with inflation, yet US Treasury securities keep moving up.
This oil spill is like a vortex. Ruins everything it touches. Coastline, jobs and companies, you name it. Like the spill itself, it casts a dark shadow over the market. What the spill is doing is affecting market sentiment and not in a good way. We can now actually measure market sentiment and create a number from it and combine that number with other market data.
When the markets swoon, traders are making people pay (volatility premiums go up as they should in these conditions) and buyers are hitting the exits.
The Euro shivers still resonate. No doubt. Usually for a day or two lately but they are very real and drive our equity and volatility markets to hair raising swings. The stock market does not seem to care about fundamentals or earnings anymore. Does any of the recent volatility moves make anything standout as a possible opportunity?
The insane market gyrations last week have had one positive note for investors.
With all the ink spilled on the bad news headlines over the past four weeks, it's a good time to see just how good the earnings looked directly, and to compare them side-by-side with everyone reporting.
That catchy line from the movie seems to describe the change in action last week.
The news has been bad for GS in the short term and the system will take its course. In the meantime, let's analyze the news since last Friday and see how that has effected option volatility for GS.
The Greek Debt Crisis seems to be spilling over to the quality end of the corporate credit risk markets.
The hangover of the Credit Crunch is alive and well with the market making highs for the year. Does the VIX look likely to continue moving down?