Big Picture

VIX has everyone’s attention after closing on Friday at 9.51 which is the lowest level since December 1993, but also the lowest non-holiday week close on record.  The S&P 500 finished Friday at an all time high and is now up over 10% for the year. 

The CBOE Russell 2000 Volatility Index (RVX) vs. VIX ratio climbed last week as the Russell 2000 under performed the S&P 500 by about 50 bp.  This ratio is worth watching for an early indication that small cap stock performance will catch up with large cap stock.

Overnight / Pre-Market

Chinese GDP came in at 6.9%, 0.1% higher than expectations. 

Blackrock (BLK) reported earnings that were a bit light (both earnings and revenues) compared to street expectations. BLK was down about 2% in early trading.  It was noted that BLK experienced record ETF inflows for the quarter. 

VIX is up 0.39 to 9.90 in early trading.  July VIX (expires this week) is down 0.02 to 10.55 and the August contract is down 0.07 to 11.95. 

Looking Forward

Earnings Season kicks into high gear this week.  Netflix is set to report after the close.  Over the last three years the average move for NFLX has been up or down 11.47%, last quarter the stock dropped 2.64% in response to earnings.  The stock closed at 161.

Tuesday before the open BAC, SCHW, HOG, JNJ, LMT, MTG, and UNH report.  Historical price reactions can be found at http://www.cboe.com/blogs/options-hub/2017/07/17/earnings-week-of-7-17-2017---7-21-2017

The Economic calendar lacks any top tier data points this week.  Since oil has been a market focus the inventory number on Wednesday may be worth watching.  

CBOE Webcasts

July 19th at 3:30 Central – Dan Passarelli discusses Chart Reading for Option Traders

July 26th at 3:30 Central – Dan Sheridan discusses The 15-Day Butterfly in SPX

More information and registration at www.cboe.com/webcasts

Today in History

Disneyland in Anaheim, CA opened for business and there are a still a few lines that started that day.  The cost of the park was $17 million, today the park does over $3 billion a year in revenues basically bringing in the cost of the park about every two days. 

4097820_640px