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Equity indexes closed in the red for the second consecutive week: the S&P500 Index (SPX) closed 2,328.95, down – 1.20%, the Dow Jones Industrial (INDU) closed 20,453.25, down -0.99%, and the Russell 2000 Index (RTY) closed 1,345.24, down -1.60%. For the time being it seems like the rally in equities has stalled. As it was a short trading week, option volumes were low for the week with a total of 62,988,702 options traded, averaging 16,335,269 daily volume. Thursday, the SPX traded 1,438,798 option contracts while the VIX traded 1,324,660 option contracts. The VIX closed slightly below the 16 handle, at 15.96, but was up +13.59% for the week. Volatility has been rising for the past two weeks as geopolitical events are making investors and traders nervous. The fast approaching French election (May 7), where a highly contentious landscape now includes a communist, has been the focus of global financial markets given the possibility of political outsiders winning the presidency. As it stands, a likely showdown looms between the far right Le Pen and the communist Melanchon, both of which are considered outsiders in the French political arena long dominated by the center-right Republicans and center-left Socialists. To add to investor…

Equity indexes closed last week in the red with the S&p500 index (SPX) traded 2,343.98, down -1.24%, the Dow Jones Industrial (INDU) traded 20,596.72, down -1.48%, and the Russell 2000 Index (RTY) traded 1,354.64, down -2.13%. Total option volume last week came in at 91,637,234 contracts traded, with a daily average of 18 million contracts, slightly higher than the average March daily volume of 17.3 million contracts. The SPX index traded 1,196,669 option contracts on Friday and the while the VIX saw 593,344 contracts trade. After weeks of what can only be described as catatonic, volatility was trading higher with April VIX futures (UXJ) trading 14.50, up +4.13, as spot VIX traded 14.52, +12.04. The failure to bring the President Trump & Speaker Ryan version of the Obama care repeal to a vote last week is weighing heavy on the markets this morning. Equity futures were treading heavy this morning as S&P500 futures (ES) traded 2,323.50, -21 points before NY-open breaching the 50-day moving average. The S&P500 index (SPX) is set to open at the lowest level in over six weeks. In large part, the market’s concerns with the failure to pass a President Trump’s healthcare bill have more to…

Welcome to the central bank week: the Fed meets on Wednesday where the markets are expecting a rate hike, while the Bank of Japan, Bank of England, and the Swiss National Bank are expected to hold rates where they are. Equity markets managed to close lower for the week: the S&P500 Index (SPX) closed the week at 2,372.60, down -0.11%, the Dow Jones Industrial closed the week 20,902.98, down -0.25%, and the Russell 2000 Index (RTY) closed the week 1,365.27, down -1.37%. Total option volume was average for the week with the OCC reporting over 152,906,060 option contracts traded last week. Friday saw a total of 17,099,336 option contracts change hands with the SPX trading 1,107,367 contracts. The CBOE Futures Exchange (CFE) also saw average volumes as 234,686 VIX futures contracts were traded Friday, while 474,965 option contracts changed hands in the VIX. Speaking of the VIX, volatility remains subdued as the VIX traded the 11 and 12 handle the entire week as has been the case for many weeks now. There simply have been no market news or events that would have pushed volatility to higher levels, leaving the VIX futures in contango for as many weeks. As such,…

Speculation rose last week that Russia, already suspected of interfering with the U.S. elections, may have done the same with the British vote to leave the Euro. In other news, the Oscars announced the wrong winner last night, if you care about that sort of thing. Equity markets closed mostly higher on Friday with the S&P500 Index (SPX) closed 2,367.34, up +0.15%, the Dow Jones Index (INDU) closed 20,821.76, up +0.05%, and the Russell 2000 Index (RTY) closed 1,394.52, down -0.01%. Options trading volume was decent with over 17 million option contracts traded Friday, as the SPX saw 1,331,745 contracts trade. The CFE saw 275,933 VIX futures contracts trade as the CBOE had 1,101,639 VIX contracts change hands. Equity futures were lower to flat this morning, pre-NY open, with the S&P500 e-minis (ESH7) traded 2,362.75, down -2.25. Treasury futures were also trading lower with the 10-year note traded 125-14+, down -5/32, and U.S. dollar index futures (DXH7) were flat to lower 101.07, -0.02%. Commodity futures were trading mixed as precious metals were treading lower while light sweet crude futures (CLJ7) traded 54.45, +0.83%. VIX futures (UXH7) were higher this morning hovering around 13.37, up +0.34% but the term structure remains…

Last night we watched the best Super Bowl yet, with the New England Patriots defeating the Atlanta Falcons 34-28 in overtime. The loss was heartbreaking to Atlanta fans, but it was a testament to the determination of a team to win and the sheer magic of Tom Brady: he is a magician! How else can one explain Patriots winning in overtime? The markets were up big on Friday after President Trump signed a directive to roll back Dodd-Frank and other aspects of the financial regulation Obama enacted since 2008. Bank stocks traded as if they liked the news with Bank of America (BAC) gaining +1%, JP Morgan (JPM) gaining +3, and Wells Fargo (WFC) gaining +0.9%. %The S&P500 Index (SPX) closed 2,297.42, up + 0.73%, the Dow Industrial (INDU) closed  20,071.46, up +0.94%, and the Russell 2000 Index (RTY) closed 1,377.84, up +1.50%. In the U.S. 18,647,079 options traded with the SPX trading 1,315,966 contracts. The VIX saw 573,848 options trade while the CFE had 209,653 VIX contracts trade. Equity futures were trading slightly lower this morning pre-NY open as bond futures traded higher. Gold traded 1231.00/oz, +10.00/oz as Iran is back in the news (not in a good way)…

Welcome to the first week of the Trump administration. The transfer of power went as smoothly as it has always occurred in the U.S., a fact the media has highlighted for the past couple of weeks. Stocks closed the week slightly mixed but were in the green on Friday: the S&P500 index (SPX) closed 2,271.31, up +0.34%, the Dow Jones Industrial Index (INDU) closed 19,827.25, up +0.48%, and the Russell 2000 index (RTY) closed 1,351.85, up +0.45%. On inauguration day a total of 21,654,230 options traded in the U.S., the SPX traded 1,133,653, while 428,697 VIX options changed hands. CFE trading volumes were light as a total of 199,620 VIX futures were traded. This morning, before the NY open, equity futures were trading lower with S&P 500 e-mini futures trading 2,261.50, down -0.19%, 10-year note futures were trading 124-14+, up +7/32nds, gold futures were trading 1,214.50, up +0.80%, and WTI oil were trading 52.37, down -1.60%. With president Trump mainly talking about his growth plans, the dollar is under pressure this morning as U.S. dollar index futures are lower by -0.35% to 100.34. President Trump is expected to sign an executive order today to renegotiate the NAFTA agreement so the US dollar, the…

Equity markets closed mostly in the green Friday with the S&P 500 index (SPX) closing 2,276.98, up +0.35%, the Dow Jones Industrial  index (INDU) closing 19,963.80, up +0.32%, and the Russell 2000 index (RTY) closing 1,367.28, down -0.34%. A total of 17,194,813 options traded on Friday with the SPX trading 1,276,095 options and the VIX trading 517,769. On the CFE, VIX futures volume was 167,765 with open interest increasing by 6,910. Equity futures are trading flat to down this morning before NY open. S&P500 e-minis (ES) are trading 2,269.25, down -0.09% and Russell 2000 e-minis (RTA) are trading 1,362.60, down -0.18%. West Texas intermediate crude futures (CL1) are also lower, trading 53.02, down -1.80%, and Gold futures (GC) are trading higher to 1,181, up +0.65%. The US dollar index is trading slightly at 102.22, up +0.01% and 10-year Treasury note futures (TY) are trading 124-23, up +10/32. Most everyone I talk to seems to be watching the Dow Jones Industrial Index (INDU) as it keeps flirting with the 20,000 level. Personally, I don’t understand the fascination with that particular level, but then again investor psychology is a large part of our business. Well, that and the fact that the financial…

The last trading week of 2016 will be a short one. Equity markets have been trading sideways now for the better part of two weeks, albeit near all time highs, and this week is likely to see more of the same. Although some traders and investors are taking the rest of the week off, one has to wonder what the catalyst would be to change the status quo. The sharp rally in the indexes over the past month could see traders and investors take profits and prove to be an opportunity for large investors with set investment mandates such as pension funds to rebalance their portfolios. Friday saw light volumes with the SPX pit trading 567,006 options while the VIX saw 201,242 options change hands. CFE volumes also were light with 154,166 VIX contracts traded. Despite the light volumes, equity index averages closed in the green: S&P500 index (SPX) closed up +0.13% to 2,263.79, the Dow Jones Industrial Average (INDU) closed up +0.07% to 19,933.81, and the Russell 2000 (RTY) closed up +0.65% to 1,371.51.  The US dollar index remained little changed over the week as gold and treasuries find a floor. Before the NY open, futures are mostly trading flat to higher. S&P futures are up +0.07% to…

The Federal Reserve raised the overnight borrowing rates yesterday by 25 basis points (bps) to a range of 50 bps – 75 bps giving a boost to the US dollar which is trading higher against other currencies. The US Dollar Index December Futures (DXZ6) are trading above the 103 handle for the first time in over a decade. The US dollar was especially stronger against the Euro with December Euro Futures (ECZ6) trading lower -1.4% on the day to 1.0413. The rally in the US dollar comes amid improved expectations that the Fed will continue to raise interest rates at least three times next year, making it the lone central bank pursing a tightening monetary policy. Economic data has been supportive as well increasing the probability the Fed will raise rates next year as month-over-month Consumer Prices for November matched expectations of an increase to 0.2% and year-on-year prices rose to 1.7%. Treasuries traded lower as yields rose, with the 10-year treasury rate traded over 2.61% at one point today and US dollar strength continues pushing precious metals and bond prices lower. Equities are recovering after closing lower yesterday, with the SPX 500 trading the 2268 handle. Financials are leading…

On Friday, equity markets closed in the green for the most part with the S&P500 Index (SPX) closing +0.04% at 2191.95, the Russell 2000 Index (RTY) closing +0.03% at 1314.25, and the Dow Jones Industrial Average (INDU) closed down -0.11% at 19,170.42. Total option volume on Friday was 15,890,577. The SPX traded 1,103,182 options and VIX options volume was light at 315,374 contracts.  The big story over the weekend was the Italians overwhelmingly voted “NO” to the to the proposed Constitutional changes which would have given more power to the upper house of Parliament and the Prime Minister. The vote was clearly a rejection of Matteo Renzi who promised to resign in the event his legislative reform was defeated. The concern was his resignation would leave a void to be filled by the far right “5 Star Movement” party which supports an exit from the Euro zone. True to his word, Renzi announced he would submit his resignation the president, but even so, he may still govern until a new Prime Minister is installed. At the start of the Asian session yesterday, traders sold the Euro heavily against the dollar trading as low as 1.051, pushing it to the lowest levels in nearly two years. But overnight and into…