This week saw a little more volatility. The ES was down 30 handles on monday and by tuesday it had retraced most of that loss. The VIX futures had over a 1 point range on monday, which is a lot bigger than we have since lately. It shows a lot of people are probably under hedged and were dashing for some quick protection. Today is JAN expiration and the ES has traded in a 6 point range. I've noticed that some of the stocks that have been parabolic throughout 2013 are starting to crack. BBY, LULU, and GME all got hit hard this year. It seems the broad market is holding up for now, but I think these are the warning signs you have to pay attention to.
The commodity plays I talked about at the beginning of the year are doing well relative to the broad market. Its refreshing after a one direction market last year to see some two way action. Implied volatility is still at extremely low levels, don't get caught selling premium at these deflated levels. This market is slow but stay awake, there will be lots of opportunity in 2014.
