Morning Thoughts June 26

  • Ugly day in TERRIBLE volume – 11% below 20day ave – didn’t crack 6b shares – no one wanted to play ahead of the EU summit meeting (Thu-Fri). We started the day down and traded sidways most day
  • Flight to safety evident – Coals, Semis, Brokers, Lifers all hit – Uts, Telcos, Gold/Silver, Pharms better – Vol (VIX) rallied 12.5% and back above 20. BETA index fell 3.2% – Cyclical index (CYC) fell 2.6% – UST 10y back to 1.6% – Treasury auctioning $99b worth 2, 5 & 7yr next 3 days


  • At a breakfast meeting this morning most market participants I heard thought this week’s eurocrat meeting would be a non-event for the market.  I neither agree or disagree with that but when I hear such consensus ahead of a big event like this I perk up.
  • Implied volatility in FX markets are much higher than realized volatility currently, which is saying that markets arent moving much but also implying that participants are expecting a larger move soon.
  • In terms of equities, the S&P remains above the 1300 mark and at the 50% retracement level of the June rally.  I am interested in going short below 1300 and long above 1340.  Until such time I remain hitting it intraday and that is all.
  • Broadly speaking we are trading in a wide and choppy range, as are equities.  This does not lend well for Bucket 2 trading but does lend well to big cash positions in the trading account.








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