The Market Did Some Interesting Things This Week: Make Sure You Don't Miss It
The Market Did Some Interesting Things This Week: Make Sure You Don't Miss It
By:Ryan Gaynor
A weekly roundup of tastylive videos offers the best trading tips from the network’s wealth of financial shows
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Tom Sosnoff, Christopher Vecchio and Tony Battista illustrate concerns over potentially disappointing outcomes for consumer-facing stocks amid a rich market valuation.
Vecchio outlines a landscape where lofty expectations meet negative guidance from several companies, potentially indicating a slowdown in consumer spending. He supports his argument with data from the National Restaurant Association demonstrating a decline in customer traffic to levels last seen during the global financial crisis. Vecchio says retail and restaurant sectors, often first to decline in a downturn.
You don’t want to miss Sosnoff's input on the quarterly earnings system, debating its impact on company strategies and investor behavior. He specifically looks at the unique approach Elon Musk takes with Tesla's projections. The volatility of commodities, particularly gold and silver, is discussed, highlighting the dangers for retail investors in shorting these assets.
Finally, there's anticipation for the consumer price index (CPI) release, with speculation on its impact on bond markets and inflation expectations, setting a cautious tone for the financial landscape ahead.
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Sosnoff and Battista discuss current market movements including individual stock performances and market indices like the e-mini S&P 500, NASDAQ, and Dow.
Notably, the stock of Moderna (MRNA) is up unexpectedly, affecting trading strategies. They then hop into trading tactics, focusing on Moderna's upcoming earnings and market liquidity. Sosnoff relays some of his trading expertise and explores the concept of zero days to expiration (DTE) trades, assessing risk management and the impact of daily trading on weekly risk profiles.
Sosnoff analyzes strategies such as selling straddles, strangles and iron flies, using 52 weeks of data to understand the risk of clustering bad outcomes. The study concludes that selling zero DTE premium is generally profitable, with defined risk trades offering significant risk reduction through aggressive management.
Overall, the talk provides insights into dynamic trading strategies and risk assessment in a fluctuating market environment.
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Sosnoff, Battista and Anton Kulikov break down a case study comparing asset behaviors (SPI, IWM, TLT, GLD) across different volatility environments. They reveal how skew (asymmetry in price distribution) arises in options markets based on underlying asset price movements during high or low implied volatility periods.
Key findings include that equities and gold display notable skew in high volatility environments, while bonds remain symmetrical, aligning options pricing with the observed skew in market conditions.
Ryan Gaynor is a video content specialist at tastylive.
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