The SPX is now in the process of making a consolidation pattern in the form of a right triangle or perhaps a rising wedge during which implied volatility is likely to remain high. For those who want to trade the swings it appears a leg down to reversal point 3 is now underway.
"May you live in interesting times" is an ancient Chinese curse. The fact that the last week has seen neck snapping and unprecedented changes in volatility, I think we qualify for living in what these philosophers would consider to be interesting times.
For those who may be looking for long ideas after the sell off here is a relative strength idea from the Options Data Analysis and Rankers & Scanners sections of Ivolatility.
What happens to stock markets, which are now dominated by mathematical algorithms (algos), when they are all programmed to do the same thing? The likely answer is – no bids.
That catchy line from the movie seems to describe the change in action last week.
A look at market activity from a volatility perspective
Generally, there are two categories for the word edge; one describes a physical characteristic or location, such as a sharp edge or the edge of the cliff or canyon as shown above while the other is an analogy for advantage, such as having an edge or getting an edge. In this Digest, we explore both.
Many quarterly earnings reports are now coming every day and so far, most have beaten expectations.Instead of trying to guess which companies will beat, our approach to earnings is to look for prospective volatility opportunities.
Heavily indebted Greece formally asked for help from the European Union and the International Monetary Fund.
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.
Up until Goldman joined Greece on Friday, SPX was continuing higher with only the slightest indication of retesting support at the breakout high of 1150.45. Now all of that has changed.
The 2Gs – Goldman and Greece ? it took both, but finally the retest of the S&P 500 Index breakout above 1150, has started.