Condor Options

Markets ripped higher pre-open, gave it all back right away, moved higher again, and then gave it all back again through to the close. There: we just saved you six and a half hours, you didn’t miss a thing.

Alcoa announced earnings after the close and missed and is down another 15 cents after a -1.50 day.

Indexes hit some overhead resistance and volume was really blah today. The VIX, which was down another 3% intraday, closed down just 0.03.

Great comment from Bill Luby today:

In some respects, volatility is the opposite of liquidity, so those who are wondering why the VIX has a 21 handle and is trading below the 200 day SMA for the first time in months can look to the recent dramatic expansion of the money supply for a large part of the explanation. [VIX and More]

In other words: liquidity providers may be the heroes of investment banks, but they’re the mortal enemies of premium sellers! :)

Reversal Readings

DIA, SPY, IWM, QQQQ – all middling
XLE – Energy – 99.91
EWZ – Brazil – 99.70
EWA – Australia – 99.90
XLV – Healthcare – 95
RTH – Retail – 7

Some volume today in the June VIX calls at 27.50 and 32.50 – 15k each – which needn’t mean anything at all.  But it sure does seem like a great time to get long some long-dated vega.  Sure, maybe we push lower from here on the volatility indexes (i.e. maybe this bear market rally finds some legs); but can you doubt that we don’t see some implied volatility popping before June or July expiration?