When the leaders don’t lead - look at the volatility
My catchy title does not mean our illustrious politicians of course (although the Euro lot seems to be getting a bit more on the ball) but watching the market trade intraday. The market had a decent reversal by the announcement of the Spanish stress tests, but as of this writing on the close not much more has materialized at this quarter end.
If you note the real time VWAP landscape in AlphaVision™ for Bloomberg, the big cap market leaders in technology (GOOG and AAPL) suffered all day to find a bid. The fact that they are red in the landscape means the stock is down on the day. The names under the horizon are trading below their value weighted average price for the day. Buildings that are red and pointing down mean stocks with a very low relative strength on the day. Not even a quarter end mark up could help.
As this season ends, the big rally the market had went out with a whimper. The sell off today was mostly the big names running out of gas but generated a nice little rally in the volatility. Monday (three days from now) will end up being the volatility sale for the week as the market looks for some new traction and continues sideways now that more Euro news is out (again, it was not awful). Make sure to close the short volatility positions ahead of NFP just in case.
AlphaVision™ – data from Bloomberg
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