#Stocks: , $NVDA

#Macro: #Rates, $SPX, $DXY

Mike’s Reading The Markets Macro Subscription Service on Seeking Alpha

• RTM: Divergences Between Stocks And Risk
• Rates Dump Following Weaker Jobs Report
• Apple/Jobs Preview
• RTM: Have The Stock Market Declines Only Just Started?

See Me At The Seeking Alpha Investing Summit

This is probably going to be a dull week in terms of newsflow.  Today, we had Barkin and Williams from the Fed talking, and Barkin was more Hawksih on the rate outlook than Williams, although Williams wasn’t as dovish as he has been in the past. Tomorrow will be Kashkari’s, and he has undoubtedly been on the more hawkish side of things, so I expect that again tomorrow.

The 2-year rate rose today by almost two bps and back to 4.84%. For now, the 2-year remains in an uptrend despite last week’s declines. That has not changed, even though the bull flag failed.

The dollar started the day lower but finished higher, holding above the 105 support level.

Oddly, the VVIX, which measures vol of vol, closed today at 73.46, its lowest close since May 2015. I guess buying puts right now is pretty cheap. But then again, why do you need options that expire in 30 days when you have S&P 500 options that expire every day? Why pay for the time you do not need?

The S&P 500 looks content to fill the gap left behind at 5,200.

Despite the S&P 500 rising and VVIX hitting its lowest point in a year, the one-month implied correlation and VIX index finished higher and flat, respectively. This is kind of odd. One would think with the S&P 500 up about 1% on the day, the VIX and 1-month implied’s would have been down.

Nvidia still has a lot of gamma to overcome over the next couple of days if it is to make it to $950. It would not be easy.

It will be particularly difficult if IV starts moving back up to 65% as well because that tends to be the upper limit for the stock price. Options probably just become too expensive for traders to profit from once the IV hits 65%.

 

-Mike

 

Charts used with the permission of Bloomberg Finance L.P. This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.