Market sentiment was mixed last week following NVDA earnings and Jackson Hole. While NVDA’s solid outlook pushed the market to within inches of all-time highs, Warsh’s hawkish tone seemed to increase the probability of a September rate hike. Throughout August, the S&P 500 has closed in a narrow 2.6% band (SPX 7,600 – 7,800). The […]
options skew
Volatility Has Compressed. What Happens Next?
The S&P 500 pulled back slightly last week, and the market’s recent volatility compression phase appears ready for a reset. With earnings season largely over, both index and single stock volatility have dropped from the elevated levels that prevailed earlier this summer. Our pre-market Founder’s Note on Friday explained how substantial short-options positions cleared with […]
How Traders Can Play Low Volatility Environments
The S&P 500 has spent much of the summer grinding steadily higher to achieve record highs. Meanwhile, implied volatility has reset toward yearly lows for both major indices and many single stocks. When options become this cheap, the price of volatility itself can open new trading opportunities. The Term Structure chart reveals current SPX at-the-money […]
Welcome to the Summer Melt-Up
The S&P 500 delivered a high octane four-day run last week, establishing all-time highs with a 6% rise from weekly lows. Shifting interest rate expectations, easing Middle East tensions, and strong corporate earnings powered the dramatic rally. The sharp surge brought out notable divergences across the tech space. Software outperformed the broader market, with strong […]