Summary
- Vol is bleeding across all the major averages as tech leads.
- The Fed could walk back a September hike if they wanted to. The point is they don’t.
- A trader states his conviction and how he’d trade it, and why he’s not going to do it. Thoughts worth pondering.
Market Intro
Tech stocks (XLK) are leading today’s charge higher for US equities (SPY, DIA, IWM); The tech-heavy NASDAQ (QQQ) is unsurprisingly outperforming the other averages.
Whether you’re looking at SPX, NASDAQ, or Russel vol, domestic implied volatility is taking it on the chin as some of last week’s jitters subside.
Preach it Steve! The point that Mr. Peterson makes relates to one of my favorite sayings:
“Markets don’t change when fundamentals change; markets change when beliefs change.”
For now, the broader belief pattern seems to be that the Fed is on a benign and predictable tightening schedule. The ECB (FXE), on the other hand, is still courting a highly experimental and accommodative monetary policy, and as such, any small change in the message may signal greater changes to come.