Of all the interesting market dynamics the one I am becoming fond of is the rising Chinese interest rates. China is growing too fast! Slam on the breaks and sell the stocks because interest rates are going up. I fondly remember the last Democratic President and the high interest rates we had to endure back in 1999. Ah… the good old days. So what does AlphaVision serve up for us today?
For our beta testers the View is Cheap Implied Volatility 30 Day (www.aqumin.com). I had the Airlines down 3rd as a group this morning with Pinnacle Airline Corp. (PNCL) reporting less than expected earnings. In the view below, the taller the building the more the name is down for the day. Red color indicates the stock is trading closer or right on the one year lows for 30 Day Implied Volatility (after earning volatility declines quite a bit). China Southern Airlines (ZNH) was down around 5% which was much worse than the average for the group which was < 1%. There is also a bit perkier Implied Volatility with earnings two months away in ZNH.
Looks like a bad day to be a Chinese Airline instead of one with just bad earnings. To me this looks like a bit of an overreaction. ADR’s tend to gap, are illiquid and stay in a spot and there has not been much buy pressure for ZNH today. Maybe when everyone changes their minds and decides 1999 is not a bad place to be over the next couple of days, ZNH zips right back to where it came from.
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