CBOE

"Trump Trade 1.0" Is Over - Why It Will Take Some Time To Ship Version 2.0

Do not fear: there will be a “Trump Trade 2.0” at some point this year. Either valuations will retreat to the point where they reflect the reality of a legislatively-driven set of catalysts, or Washington will (in its own time) deliver on a pro-growth agenda as the market treads water. Just remember: Washington doesn’t work in New York minutes.

Global Stocks Tumble; Gold, Safe Havens Jump On Doubts Trump Tax Cuts Will Pass

Global stocks tumbled amid growing doubts President Trump will be able to deliver on a promise of tax cuts that has powered stocks markets to record highs pushed shares lower on Wednesday and drove investors to seek safety in government debt, gold and the yen. As DB put it: "Warning! US equities can occasionally go down as well as up a lot."

Tail-Risk Hedges Spike To Record High

While VIX declined last week, the cost of protecting against major market swings has spiked above its previous Brexit-vote-day peak, reaching a fresh all-time high.

Is The Oil Price Plunge A Turning Point?

For more than two years, the industry has believed that higher prices are possible without extreme reductions in stocks. That is a dream. Perhaps markets have woken up from that dream.

Now The Fun Begins - SNAP Options Start Trading Today

With practically all but the IPO-allocated insiders still under-water, Snap shareholders will be anxiously awaiting today's unleashing of options of the money-burning, user-shrinking 'camera' company.

Things Just Got Even Weirder

Just when you thought the 8 year bull market for US stocks had shown us everything, something new comes along. 

The Second Dumbest Kind Of Money Is Pouring Into Stocks - "With A Vengeance"

One of the traditional signs of market tops is individual investors finally succumbing to the lure of apparently easy money and pouring their savings into the stock market. In the past this dumb money flowed into equity mutual funds in general. But today it’s favoring exchange traded funds (ETFs)...

Charts Of The Week: 10 Reasons To Be Cautious In This Market

"First, 'record levels' of anything are records for a reason. It is where the point where previous limits were reached. Therefore, when a ‘record level’ is reached, it is not the beginning, but rather an indication of the maturity of a cycle. While the media has focused on employment, record stock market levels, etc. as a sign of an ongoing economic recovery, history suggests caution."

Make Stocks Volatile Again

January tends to show extremes of the market’s perceptions of near term risks, for good or for bad. And we know that at current levels the VIX highlights a complacent market. Does that assure us that things will get choppier from here? Of course not. But to be boldly bullish here is to ignore the historical patterns. And that seems riskier than staying aware of both history and current market dynamics. Based on the level of the economic policy uncertainty in the world, a regression model would have predicted that the VIX would be pushing 30 instead of hovering around 10.

What If Hillary Had Won?

Fixed income markets are essentially in a new world; US stocks, by comparison, are in only a slightly better position. The “Trump rally” has only been worth 4-5% when compared to our “What if” Clinton scenario. Realistically, it should either be more (if bond markets are right about a breakout in inflation/corporate pricing power) or less (with higher rates pressuring equity valuations in the absence of greater earnings power).