etfmsolutions: VDX Updates, MOD and More...04.10.16

Sunday, April 10, 2016

VDX Updates, MOD and More...04.10.16

Looking forward to next week earnings continue to set the trend. Technically, the charts suggest a bearish skew but there are underlying currents in the bond sector (where short interest is huge) that may frustrate our algorithmic strategy. For example, even though TLT faltered on Friday the OTM calls collapsed far beyond the value normally ascribed by implied volatility. And, on Thursday, even as TLT was performing like a rocket the OTM calls were actually flat.. I look at these things during the trading day just for possible clues as to what the big boys are doing and lately there have been more than a few decouplings like the TLT/option behavior.
Bottom chart is latest consensus sector interest courtesy of State Street.

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