Senior Equity Derivatives Trader

Simon Harris

Equity Derivatives

<ul>
<li>Weekly summary of vol changes and moves across Global Markets</li>
<li>Analysing ATM volatility and skew changes over the last 5 days</li>
<li>We suggest a few trades to take advantage of the implied vol surfaces</li>
</ul>


Weekly summary of vol changes and moves across Global Markets
Analysing ATM volatility and skew changes over the last 5 days
We suggest a few trades to take advantage of the implied vol surfaces


EQD | Volatility Update: A Look at Global Indices - What Trades Make Sense?

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>In last week's Compass (Aug. 23) we discussed the increasing odds for a deeper pullback in the broad market indexes.</li>
<li>This was due to 5-week uptrend breaks on the SPX, NDX, and Russell 2000, the Fed tightening, and with Treasury yields, the U.S. dollar (DXY), and commodities (DJP) inflecting higher.</li>
<li>The market remains in pullback mode; the SPX, NDX, and Russell 2000 are all approaching 50-day MA support, the first big area of interest on this pullback.</li>
</ul>


In last week's Compass (Aug. 23) we discussed the increasing odds for a deeper pullback in the broad market indexes.
This was due to 5-week uptrend breaks on the SPX, NDX, and Russell 2000, the Fed tightening, and with Treasury yields, the U.S. dollar (DXY), and commodities (DJP) inflecting higher.
The market remains in pullback mode; the SPX, NDX, and Russell 2000 are all approaching 50-day MA support, the first big area of interest on this pullback.


Headwinds Persist, Including Rising DXY, 10-Yr Treasury Yield, & Commodities; Buying Staples, Solar

<ul>
<li>After a substantial rally, the S&amp;P500 was unable to break above its 200-day MA and market indexes have violated steep 5-week uptrends; we view this pullback as a critical test.</li>
<li>This is where we see if prior breakout levels/important moving averages hold and market indexes make a higher low, or if this was nothing more than a bear market rally.</li>
<li>Barring a Fed pivot, and with Treasury yields and the DXY inflecting higher (and potentially commodities, too), it increases the odds for a deeper pullback in the broad market indexes.</li>
</ul>


After a substantial rally, the S&amp;P500 was unable to break above its 200-day MA and market indexes have violated steep 5-week uptrends; we view this pullback as a critical test.
This is where we see if prior breakout levels/important moving averages hold and market indexes make a higher low, or if this was nothing more than a bear market rally.
Barring a Fed pivot, and with Treasury yields and the DXY inflecting higher (and potentially commodities, too), it increases the odds for a deeper pullback in the broad market indexes.


Don't Fight the Fed; Pullback Underway as Rising DXY and 10-Yr Treasury Yield Back to Being Headwind

Consumer Discretionary Select / Technical Analysis

<ul>
<li>We continue to believe that the bear market lows have already been established.</li>
<li>It remains to be seen whether the indexes will experience a meaningful pullback first, or whether we are already experiencing the initial leg of a new bull market.</li>
<li>Thus far, market indexes have ignored overbought conditions, which is historically a sign of strength during the initial leg of new bull markets.</li>
</ul>


We continue to believe that the bear market lows have already been established.
It remains to be seen whether the indexes will experience a meaningful pullback first, or whether we are already experiencing the initial leg of a new bull market.
Thus far, market indexes have ignored overbought conditions, which is historically a sign of strength during the initial leg of new bull markets.


Upgrading Discretionary to Overweight, Downgrading Energy & Health Care to Market Weight

<ul>
<li>The weight of the evidence suggests that the lows for this bear market have likely already been established, but that does not mean it will be smooth sailing from here.</li>
<li>The SPX and NDX are both testing important resistance levels (4165-4180 and the YTD downtrend, respectively), making this a logical spot for the indexes to stall and potentially pull back.</li>
<li>Ultimately, we would expect to see support near their 50-day MAs as the market goes through a bottoming process. We remain neutral overall.</li>
</ul>


The weight of the evidence suggests that the lows for this bear market have likely already been established, but that does not mean it will be smooth sailing from here.
The SPX and NDX are both testing important resistance levels (4165-4180 and the YTD downtrend, respectively), making this a logical spot for the indexes to stall and potentially pull back.
Ultimately, we would expect to see support near their 50-day MAs as the market goes through a bottoming process. We remain neutral overall.


S&P 500, Nasdaq 100 Testing Key Resistance Levels; Pause Likely; Buying Biotech

United States

Invesco QQQ Trust Series 1 is an exchange-traded fund incorporated in the USA. The ETF tracks the Nasdaq 100 Index includes 100 of the largest non-financial companies by market cap listed on Nasdaq. The Index reflects companies across major industry groups including computer hardware and software, telecommunications, retail/wholesale trade and biotechnology.

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Invesco QQQ Trust Series 1 (QQQ US)

EQD | Volatility Update: A Look at Global Indices - What Trades Make Sense?

A brief look at global vol changes over the last week, analysing vol and skew moves. We identify some trades that make sense based on the shape of...

Simon Harris

Headwinds Persist, Including Rising DXY, 10-Yr Treasury Yield, & Commodities; Buying Staples, Solar

We still see the market as being in pullback mode; the $SPX, $QQQ $NDX, and $IWM $RUT are all testing 50-day MA support, the first big area of...

Vermilion Research

Don't Fight the Fed; Pullback Underway as Rising DXY and 10-Yr Treasury Yield Back to Being Headwind

$SPX $QQQ $IWM Pullback Underway as Rising $DXY and 10-Yr Treasury Yield Back to Being Headwind; Commodities $DJP $BCOM Attempting to Break Out....

Vermilion Research

Upgrading Discretionary to Overweight, Downgrading Energy & Health Care to Market Weight

Upgrading Discretionary $XLY to Overweight, Downgrading Energy $XLE & Health Care $XLV to Market Weight; Many indexes with major bullish...

Vermilion Research

S&P 500, Nasdaq 100 Testing Key Resistance Levels; Pause Likely; Buying Biotech

$SPX is testing important resistance in the 4165-4180 area, the same resistance level we were monitoring in early June before the market tumbled 13...

Vermilion Research

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