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Tag Archive | "put/call"

Selling Premium on the Uncertainty in Oil

Thursday, July 24, 2008

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The inverse relationship between oil prices and equity markets still seems intact: as crude has sold off over the past week, markets have lifted, and some analysts have even tried charting an hour-by-hour mapping of the correlation. While we’re long-term bullish on oil (how could anyone not be?), we don’t anticipate an immediate or intense turn around in crude prices. At the same time, while the price of oil could certainly drift a bit lower, we don’t foresee any catalysts…

Rally Stalling Out

Tuesday, July 22, 2008

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The short-term bottom that formed on July 17 and the rally the following day were marked by incredible volume and by a convincing breadth reversal. Since then, volume has trailed off quite a bit (as you would expect). More importantly, even though the indexes have rallied up this morning off of their premarket lows, breadth has turned quiet negative, and the $TRIN, $TICK, and put/call readings are all flat-to-uninspiring. We suppose the key question here is whether the markets will…