Apple vs SPX ratio breaking up here. Impressive!
Hedge your Apple(s)
Great earnings, but Apple is approaching big resistance levels shortly. Apple volatility is coming down hard post earnings. Make sure to use crashed implieds wisely. One way is implementing replacement strategies, selling stock and buying cheap upside options. You will miss the few percentages if this squeezes further, but your options will kick in quickly. FOMO chasers are probably better off using cheap upside options than chasing stocks here.
That insane concentration
The recent performance has been very concentrated. 97% of SPX YTD performance comes from 15 stocks.
Cuts in time or too late...
Huge difference between rate cuts in time and rate cuts too late.
Liquidity - green shoots?
Bofa writes: "...global free liquidity – measured as the gap between money supply and nominal economic growth – is now clearly in the positive territory for the first time in two years, implying positive returns in the next year."
Oil is "back"
Oil continues the bounce move, putting in the biggest up candle in a very long time. So far a great reversal inside the range where most continue buying highs and puking lows (more from yesterday's thematic email here). Mean reversion requires the "opposite" thinking.
It moves a lot and short gamma dealers are magnifying all moves...puke lows, chase high is very much alive.
What happens in rates...
...must not stay in rates. BofA writes: "...chief drivers of extreme rates vol should also be of concern to equity markets: the VIX more than doubled in the 2011 debt ceiling episode, and most scenarios that get the Fed to cut are likely also very negative for equities. To directly trade the historic gap between rates and equity vol we’d still sell rates strangles and buy equity puts."
Will bond vol ever relax?
MOVE index closed at another recent high yesterday. The past week's move isn't spectacular, but the fact bond volatility refuses to relax remains an issue for the global vol puzzle.
AI mania in a pic
Nothing new really, but when presented like this you understand the hype...
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