SPX Archives - Cboe Blogs

  • Market News | Technical Analysis & Charts | VIX | Strategy | Jan 25, 2016, 9:57 AM

    Weekly Market Outlook - Reasons To Be Optimistic Here

    Weekly Market Outlook - Reasons To Be Optimistic Here

    After a scary start to the shortened trading week, Wednesday's intraday turnaround followed-through quite nicely all the way to the end of Friday's trading. By the time the closing bell rang that day, the S&P 500 (SPX) (SPY) had gained 1.4% after being down as much as 3.6% at one point on Wednesday. Better still, there's room for the market to keep rising. It's still too soon to say this is the beginning of what will be a prolonged rally; there remains an entanglement of resistance lines[...]

  • Market News | Education | Strategy | Jan 25, 2016, 9:12 AM

    Patience Will Pay Off

    Patience Will Pay Off

    Still trying to stab at that bottom?  Not a game I like to play.  Frankly, taking a grab at falling knives has proven more dangerous than fun.  This market is proving there is very little reason to step in and buy for any length of time longer than few hours, maybe a full day.  So many want to get in on this very oversold market.  Why?  Just look at last August and October, or October 2014 where deep oversold conditions existed.  Utilizing patience will serve you[...]

  • Weekly Review - Russell 2000 Index and Options - 1/18 - 1/22

    Weekly Review - Russell 2000 Index and Options - 1/18 - 1/22

    Investors got a slight reprieve from what has been a difficult start to the year as both the Russell 1000 (RUI) and Russell 2000 (RUT) rose last week.  RUI gained 1.36% while the small cap focused RUT was up by 1.28%.  There has been nowhere to hide in 2016, but large cap stocks have held up pretty well versus small caps.  RUI is down just over 7% in 2016 while RUT is down a little more than 10%.  The chart below indexes RUI and RUT to 100 as of December 31st 2015 for comparison’s[...]

  • Market News | Technical Analysis & Charts | Strategy | Jan 22, 2016, 6:00 PM

    Weekly Stock Market Commentary 1/22/16

    Weekly Stock Market Commentary 1/22/16

    Stocks remain under extreme pressure, but it finally looks like the oversold conditions are starting to have some effect. An oversold rally is now underway. You can see, in Figure 1, that $SPX bounced off the support level at 1820. That level was also the low of both April and October 2014. In essence, nearly two years of gains -- back to April 2014 -- had been wiped out at Wednesday's lows. By the time $SPX reached those levels, the oversold conditions were myriad, and a rally has ensued. We expect[...]

  • Weekly Review - Russell 2000 Index and Volatility 1/11 - 1/15

    Weekly Review - Russell 2000 Index and Volatility 1/11 - 1/15

    The Chicago Bears are doing the same thing the rest of us did this weekend, watching the playoffs from home.  However, the stock market bears have been dominate in 2016.  Russell 2000 (RUT) history goes back to 1987 so there is not a lot to work with, but the first ten days of 2016 are the worst first ten days on record for RUT.  The table below shows the first ten days for every year when RUT started off in the red followed by what the small cap oriented index did for the balance[...]

  • Caution on Using VIX vs. Oil as a Stock Market Signal

    Caution on Using VIX vs. Oil as a Stock Market Signal

    I awoke this morning to an email from the matriarch of CBOE-TV Holly Goodhart.  She was preparing for her day with CNBC on in the background and something caught her eye.  The following comes directly from her email – I have CNBC on this morning, and they just spent a segment discussing this headline: "Markets bottom when VIX is greater than oil." This didn’t sound right to me for a few reasons, primarily because I recall many years with the price of oil in the teens.[...]

  • Market News | VIX | Trader Talk | Education | Futures | Jan 3, 2016, 9:24 AM

    Five Volatility Market Takeaways from 2015

    Five Volatility Market Takeaways from 2015

    2015 is behind us and the S&P 500 dropped (more than a rounding error) for the first time since 2008.  If you want to put a positive spin on the year you can say with dividends the S&P 500 was higher.  It was a fun year to be a market participant as we experienced some things that could be considered new or at least different relative to recent market history.  Since everyone loves lists, or gets easily sucked into them, here are five takeaways from the volatility markets in[...]

  • Market News | Technical Analysis & Charts | VIX | Dec 23, 2015, 2:01 PM

    SPX & The Golden Cross

    SPX & The Golden Cross

    For those that watch the market with a “technician’s eye” something unusual happened yesterday. It marked the first time since January 31, 2012 when the 50 day moving average on the SPX Index crossed over its 200 day moving average. Technical types call this “The Golden Cross”, which is almost unequivocally considered a bullish formation (especially in concert with increasing volume). To be fair, in order to set up a Golden Cross, it must be preceded by a “Death[...]

  • Education | Dec 21, 2015, 12:54 PM

    Weekly Market Outlook - Reasons For Caution Here

    Weekly Market Outlook - Reasons For Caution Here

    Talk about a 180-degree turnaround! Traders were bullish leading up to last Wednesday's big news, and remained a little bullish for the last part of that session. With a night to sleep on it though, they changed their minds. Thursday as bearish and Friday was even more so, turning what started out as a great rebound effort into a weekly loss as well as a break below several key support levels. If a Santa Claus rally is in the cards, the bulls are going to have to start with a lot of damage control. We'll[...]

  • Market News | Dec 18, 2015, 12:08 PM

    Weekly Stock Market Commentary: Bulls Have Not Yet Seized the Moment

    Weekly Stock Market Commentary: Bulls Have Not Yet Seized the Moment

    Stock market volatility continues to be above-average. The oversold rally that took place earlier this week seems to have run out of steam. The $SPX chart is now showing lower highs and lower lows. That is a bearish trend developing. It will remain in effect until the most recent high is exceeded (2100, in this case). Both equity-only put-call ratios remain on sell signals. Market breadth was very negative coming into the week, and the breadth oscillators fell to extreme oversold readings. Those[...]

  • Market News | Technical Analysis & Charts | Dec 16, 2015, 10:15 AM

    Stock Market Action Last Week Was Disturbing

    Stock Market Action Last Week Was Disturbing

    I often say there are a million reasons to sell, but only one reason to buy.  Last week, it seemed that any reason to sell was a good one and was valid (and used).  Friday's ugly pasting was the culmination of a setup earlier in the week the told us a rejection of prices was going to happen.  As we see in the 30 min chart from this past week early highs were rejected on a few occasions.  Further, there were several 'fakeouts' during the week where it appeared there would be some[...]

  • Market News | Technical Analysis & Charts | VIX | Dec 15, 2015, 12:19 PM

    Looking at VIX With Respect to an Initial Rate Hike

    Looking at VIX With Respect to an Initial Rate Hike

    On June 30, 2004 the Federal Reserve Open Markets Committee raised the intended Fed Funds rate from 1.00% to 1.25%.  This was the last first time we had an initial hike in interest rates (yes you read that correctly).  A lot has happened since this last first hike.  I did the quick math and my intern was nine years old, so she’s learned to drive and reached a major milestone that goes along with being 21 years old.  When we last had a rise in rates ISIS was either a pharmaceutical[...]

  • Market News | Dec 14, 2015, 12:05 PM

    Weekly Market Outlook - Did Bears Crush The Santa Claus Rally?

    Weekly Market Outlook - Did Bears Crush The Santa Claus Rally?

    Despite ending the first week of December on a bullish foot, the bears started - and finished - last week in charge of things... to say the least. Last week's -3.8% pullback was the biggest weekly loss for the S&P 500 (SPX) (SPY) since the heart of the August meltdown. Perhaps worse, the pullback broke some key support levels, and there isn't much other support until we get back to the August lows. On the flipside, between the time of year a Santa Claus rally usually takes shape[...]

  • Strategy | Trade Ideas | Dec 11, 2015, 12:11 PM

    RUT Play into the FOMC

    RUT Play into the FOMC

    With the FOMC meeting scheduled for next Tuesday, December 15, and the announcement of a possible rate hike on 2016 on Wednesday, we are seeing inflated volatility levels across equity markets. VIX (spot) is currently 21.65, whereas the Russell 2000 Volatility Index (RVX) is 22.33. Next week is also expiry, further heightening volatility levels.  The at-the-money SPX Dec 2025 Straddle is priced 53.05, implying a move of about 2.6 percent between now and next Friday’s expiration. [...]

  • Strategy | Dec 10, 2015, 2:08 PM

    3 Joys of a SPX Weekly Iron Butterfly?

    3 Joys of a SPX Weekly Iron Butterfly?

    1) By trading every week, you become a better craftsmen 2) The butterfly has a very good potential reward relative to the risk of the trade. 3)  SPX is a well diversified Index with great liquidity and you don’t have to deal with the risk of individual stocks. Definition: Iron Butterfly is a trade where one puts on an at-the-money call credit spread and an at-the-money put credit spread Trade Example in SPX:  Price is $2065 as I write this. I am looking at the December expiration[...]