Saturday, October 29, 2016

VDX Updates and Trader's Outlook...10.29.16

This week's VDX updates display the extreme oversold status of both SPY and TLT...the later of which has now broken support and COULD BE open to a mean reversion reversal. The magnitude of bearish bars however suggests that there may be more selling in store and the slope of the yield curve DOES NOT support the mean reversion case at this time.
The markets remain in a nervous flux as daily wikileaks updates reveal the depth of the Clinton's pay for play schemes.  Expect increasing volatility up through Nov 5th as things are likely to only heat up as that pivotal date approaches.
We'll look at a couple potential credit spreads later in the week (condors actually) to try and pick off some scraps from the options desk on post election day.
In the meantime Trader's Outlook has some comprehensive volatility studies as well as an economic reports calendar that's worth a look.  The near term view is volatile and bearish.

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