Market When Closed - Monday 17 March
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The End Of The Beginning?
by Alex King, CEO, Cestrian Capital Research, Inc
The S&P500 and the Nasdaq found support last week, by which I mean they stopped just selling off all day long, in each case at approximately the 61.8% retrace of the whole move up from the August Yenmageddon low to the February euphoric high. Since which time, the indices have travelled upwards with nary a pullback. The S&P and the Nasdaq remain some way below their retrospective 200-day moving averages; the Dow Jones actually peeked above its 200-day moving average today before it spooked itself and it proceeded to give up the ghost into the close.
This is a pretty interesting place for equities to be - as long as you have no fixed thesis on where they will go next. The risk/reward for either a long or a short setup is attractive, because a sensible stop level is close by (below the recent lows for a long setup; above the 200 day for a short setup) and the potential gain available is material (to new ATHs if you are bullish; to the Gates Of Hades Themselves if you lean bear).
Catalysts are many this week, including FOMC, Vix options expiry, and quarterly single-stock and index options expiry.
Let’s take a look at where we stand.
Short- And Medium-Term Market Analysis
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US 10-Year Yield
Equity Volatility
To quote SpotGamma, is this a vol crush or not?
Disclosure: No position in volatility-linked securities.