Stocks had a nice week with many indexes achieving all-time highs.  Small cap stocks in the form of the Russell 2000 (RUT) gained 0.92%, but this rise was outpaced by the Russell 1000 (RUI) which was up 1.4% for the week. 

RUT RUI 07142017

Lately I’ve been fixated on the relationship between the CBOE Russell 2000 Volatility Index (RVX) and VIX.  The RVX premium had been shrinking which led me to think a resurgence in relative performance for small caps was on the horizon.  This trend reversed itself last week so I’m sort of on the fence with this thesis.  I’ll be watching VIX and RVX closely this next week to see if the recent spike in the chart below ends up being sustained.   

RVX VIX 07142017

There was a slightly bullish RUT trade that hit the post 5 minutes before the trading week came to a close.  With RUT at 1428.80 someone came in and purchased the RUT Jul 21st 1425 Calls for 10.95 and sold the RUT Jul 21st  1435 Calls for 4.95 and a net cost of 6.00.  The result if held to AM RUT settlement on Friday (this coming week is a standard expiration week) can be a profit of 4.00 if the number is at 1435 or higher with a maximum potential equal to the price paid for the spread if RUT settlement comes in at or below 1425.  

RUT PO 07142017