{"id":55,"date":"2010-05-05T08:23:47","date_gmt":"2010-05-05T12:23:47","guid":{"rendered":"http:\/\/www.cheapiv.com\/?p=55"},"modified":"2010-05-05T08:49:36","modified_gmt":"2010-05-05T12:49:36","slug":"vix-jump","status":"publish","type":"post","link":"http:\/\/www.cheapiv.com\/?p=55","title":{"rendered":"VIX Jump"},"content":{"rendered":"

\"CBOE<\/a><\/p>\n

Most of you have been following my webinars with my former company and know that I have been a big believer in owning implied volatility.\u00c2\u00a0 The macro environment points to much larger moves and the market tens to become complacent with a nice steady move up in the market.\u00c2\u00a0 These spikes come fast and furious and if you do not own volatility before they hit, you will be chasing profits the entire time.\u00c2\u00a0 I have consistently suggested to own overall portfolio volatility for such an occasion.\u00c2\u00a0 Now is the time when you have plenty of bullets that you can start to let some go at profitable areas. If you own straddles or stangles check for profitability with the increase in implied volatility…you may be surprised.\u00c2\u00a0 I found a few straddles that I traded that were still within my break even ranges, but because of the sudden jump in implied volatility, they were not profitable.\u00c2\u00a0 Some were just breaking even, but they were losers because decay had gone against me.<\/p>\n

From the global view, if all of this fear is over Europe, then we must keep our eyes focused on European countries and their debt yields.\u00c2\u00a0 If you recall, the yields are what forced Greece to seek out other financing.\u00c2\u00a0 Their sovereign debt yields were double and triple what they normally pay.\u00c2\u00a0 If this happens to Portugal, Italy, Ireland, or Spain, then this will become the new global debt contagion.\u00c2\u00a0 China is already off 10% this year and the US has gone from 6,400 to over 11,200 without taking any major breather.<\/p>\n

We have to keep the big picture in mind when deciding on our current portfolio.\u00c2\u00a0 Now that the market has pulled back a little, we have to make sure we keep enough insurance for any major move if it happens.\u00c2\u00a0 If the European Union fails then there will be fallout here as well.<\/p>\n

There is some small support around the 10,800 level on the DJIA and some resistance tops from mid Jan. at the $10,700 level.\u00c2\u00a0 If the news drive the market down through those, then the next stop could be pretty ugly.\u00c2\u00a0 The PPT will most likely step in to make it look like this is going to rally, but yesterday was a pretty big failure.\u00c2\u00a0 We will probably see a sell off this morning then some attempts to get back some of the loses from yesterday.\u00c2\u00a0 If they continue to sell into this then be prepared for larger negative moves to come.<\/p>\n","protected":false},"excerpt":{"rendered":"

Most of you have been following my webinars with my former company and know that I have been a big believer in owning implied volatility.\u00c2\u00a0 The macro environment points to much larger moves and the market tens to become complacent with a nice steady move up in the market.\u00c2\u00a0 These spikes come fast and furious […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[22,25,11,17,9,28,10],"class_list":["post-55","post","type-post","status-publish","format-standard","hentry","category-commentary","tag-economy","tag-greece","tag-implied-volatility","tag-market","tag-stocks","tag-usd","tag-volatility"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=\/wp\/v2\/posts\/55","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=55"}],"version-history":[{"count":0,"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=\/wp\/v2\/posts\/55\/revisions"}],"wp:attachment":[{"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=55"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=55"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=55"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}