Rho, a Greek letter often used in finance and options trading, represents the sensitivity of an option's value to changes in interest rates. In the stock market, rho is an important metric for options traders to consider as it can have a significant impact on the profitability of their trades.
As we enter the final month of Q1 2022, one thing is clear...this is a wild year! Inflationary assets like oil, gold (and metals), and now wheat, are all spiking like the world is going to end, while equities are suffering their most volatile period in two years. Spurred by continued escalation in Russia & Ukraine, a Federal Reserve that continues to send mixed messages, and a blood bath in the growth sector, the $VIX index closed the week at 31.97, the highest weekly close since January, 2021. More concerning, despite an end of session rally, equities remain well off their highs, with the New York Stock Exchange closing the week at 16,129.66, approximately 7.5% below the recent highs. The...
We're now 8 weeks from the December, 2021 market top and into an extended correction that has resulted in major downside for the US equity markets that has seen the S&P 500 down 14% and the Nasdaq down as much as 22%.In our last update we mentioned that cryptocurrencies had offered fierce bounce back rallies, but equities were struggling to bounce and hold. The question was which one was leading and which was lagging. As it turned out, equities were leading risk assets lower, and the pain points we mentioned wound up being strong signals in advance of the market declines that followed: Credit showing signs of stress Bonds unable to find a bid Inflation breakout Continued pressure from the yield curve...
In our last post on the January 2022 crash, we went through the process of analyzing the recent market top and following sell signal that triggered within our proprietary set of indicators. Since then, the market has rallied a few percent from the January lows, but has struggled to regain bullish momentum despite the VIX volatility index retreating, and the bulk of the market stabilizing somewhat, chopping certainly but refusing to set new lows.Bitcoin & the crypto market have even managed to rally significantly, gaining more than 30% from the recent lows and marching higher by the day. So what gives? Is the market poised to base and rally, as it has been so prone to do, or is a bear...
