Tuesday, November 25, 2014

Losing Steam....11.25.14

Despite the strong seasonal skew we saw a classic pop and drop in today's action as traders pulled risk out of the equation and went to cash.  At the same time the M3 model moved up the ranking of XIV, which has been slowly migrating up the rankings scale for the past few days.
XLE (oil) has taken a nasty turn down the past 2 days but silver (SLV) and gold (GLD) have extended their mini rally and look to have another possible leg up ahead,

The situation with selling premium continues to be ludicrous....there simply isn't any and buy write skews that were happily paying out 1.5 to 2% returns for 30-45 day holds are now lucky to yield .5%.
The markets make daily new highs but in reality it's a tough market to make money in.
By the way, SPY and DIA closed in the red today while QQQ squeaked out a small gain.
The new XIV position is a bit suspect in the face of today's late selloff.