Friday, March 8, 2013

Monday Morning volatility

There's no doubt we have had the line on options trades, as posted a couple of days ago, all of the weekly options (a few longer) trades for February...

I noticed something Monday morning though of this week, to be exact, here's the exact post.



"What is more of a mystery is the averages, there's an inconsistency among them in different timeframes. I fully expect there will be some kind of relief rally or bounce on the resolution of the Sequester which I think has to come at some point, however last night I pointed out the larger nature of negative divergences last night and I'm wondering if this is an early sign of the amplitude of volatility getting ready to increase, this would still be basically non-directional, it would increase the size of the days up and the days down, almost like a broadening top, just with less direction.

So far that's just a guess and a guess based on some of the most inconsistent data out there, Monday morning charts.

Each average is a bit different, some are more bearish than others, some are more neutral than others, the iwM is probably the best example so far of the possible theory of increasing volatility/amplitude."


In trying to find this post, I count at least seven times I posted the same or referenced this post through the week, today were the first real two losers, many of the posts after this one were about taking the next week out or April as volatility looked set to increase. I'm going to update and double check, but after more than a dozen winners and the biggest loser of -2.5%, something changed, I noticed it early this week so it's time to make an adjustment, but most of you know what increased volatility mean.

The other theme was the Yen and how it was the pivot asset this week, I can't even count how many times I said that, today proved that to be true. I feel just as strongly about the post above regarding volatility and options as I do about a change in character in the Yen which has been supporting the market, so I'll be doing a lot of research on both and let you know what I find, how we can use it and most annoyingly, how we can take advantage of the weekly op-ex Fridays which feel like a total waste, I'll see what I can come up with.





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