Market On Close, Monday 7 October

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Not The Kind Of Upgrade Anyone Is Looking For

by Alex King, CEO, Cestrian Capital Research, Inc

It is rarely the case that the market truly responds to something in the news (because by the time it's in the news, any price-setting investor will have known it for some time and already acted on it), but in the case of such a rapid upgrade in storm status today it's just possible that the spike in the Vix, the continued run-up in crude oil, and the weakness of stocks later in the day, are in fact a reaction to worries about the impact of the incoming storm. I know of no way to model or chart "major hurricane impact in FL" so we will just keep to our usual method. The Vix spike is to be watched. Buying puts today ahead of landfall isn't necessarily something that large institutions would be doing; and if the put-buying was primarily smaller funds and retail, then we may see a volatility collapse before too long. As always we focus on the charts and let IRL look after itself.

If you're an Inner Circle member be sure to watch today's webinar if you missed it - you can catch up with them all here. We took a very close look at the bull vs. bear argument in equity indices and the Philadelphia SOX.

Short- And Medium-Term Market Analysis

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