Sometimes we get so wrapped up in the intra-day market moves that the bigger picture alludes us. Today, we focus on our Market Awareness and uncover where some of the trading opportunities lie.
The end of earnings season is approaching but there are still a few big announcements after today’s close. These were listed in a table. The table included the stock, implied volatility (IV) and implied volatility rank (IVR). The current IV and IV Rank for the SPX is low at 17 and 16 respectively, but this is still higher than 54% of the past year’s IV (IV Percentile).
A graph of IV versus IVR for some popular ETFs was displayed. The graph showed that XME (Metals and Mining ETF) had the highest IV/IVR and showed the greatest opportunities to sell option premium. On last week’s Closing the Gap Futures Edition, “Japan vs. The U.S. Where’s the Opportunity” we saw that as the Yen has risen the Nikkei has fallen. A graph demonstrated this inverse correlation. There are opportunities in both. A one year price graph of the Crude Oil Futures (/CL) Spread between June 2016 /CL and June 2017 /CL was displayed. The graph showed that the spread has narrowed from $7 to $3.25 which some say means the market is signaling a slowing of the current Crude rally.
For more on What’s Moving Markets see:
Market Measures from January 7, 2016: “New Year: What’s Moving”
Market Measures from February 16, 2016: “What’s Moving In The Market”
Market Measures from March 11, 2016: “Take A Step Back: What’s Moving?”
Watch this segment of “Market Measures” with Tom Sosnoff and Tony Battista for the valuable takeaways and an interesting look at what currently is moving in the markets and where the trading opportunities exist.
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