Simpler Sentiment – Weekly Wrap Up 9/16/16

Going into Friday morning, volatility has returned and the S&P 500 is again trying to rebound from last Friday’s losses. It has found solid support at 2120 which it tested every day this week so far.

The SPX closed Thursday at 2147 as every day so far has remained inside of Monday’s range. The VIX closed at 16.3, remaining at the highest levels since June. The VIX may be up 30 percent this last Thursday, but the actual volatility in the SPX has increased 400 percent. The short term Volatility Index, the VXST, did more than double week over week from 10 to above 20 and closed Thursday at 17 even.

Almost all of our traders were bullish or neutral on Monday, and now they look forward to next week.

Henry thinks that “next week is a coin toss.” He has effectively been using butterflies to play this tricky market.

John is “bullish Nasdaq and neutral on S&P500”.

Chris agrees. He thinks the Nasdaq is “trying to play the leader here”. He wants to see how the market acts Monday “when the big open interest in the SPY and SPX from this week will not be around to drag the markets up”. He remains neutral to slightly bearish.

David isn’t taking sides. “This is not a market for an outlook. The picture can change in a moment. I’m tracking various different scenarios and I don’t want to call them until I can rule some of them out and we’re left with one clear direction.” That being said, he is long term still bullish U. S. Equities, “but with a retest of much lower levels possible first it’s hard to be an outright holder of stocks”.

Playing the true role of the futures trader, Tony is looking to play the other side into next week. “I was obnoxiously bullish this week – let’s turn the palms around and go short next week.”

Tucker is first looking at tomorrow. “Tomorrow should be interesting since it is a quadruple witching Friday”. And he reminds us that volatility may not pick up again until Wednesday. “Next week should be fairly quiet until the FOMC announcement on Wednesday at 2pm EDT. Then who knows how the markets are going to react to whatever the Fed says.”

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Chris McKhann

Chris McKhann

Chris McKhann has been involved professionally with the stock market for more than 15 years and specifically with derivatives for 12 of those. He started as a stock broker, but quickly moved on to options and futures trading. He spent some time as the Derivatives Product Manager for TD Ameritrade. He was the chief analyst and hedging strategist for OptionMonster. He has been an options trading educator and content provider for many years. His writing and analysis has been featured on Reuters, the Wall Street Journal, Forbes, TheStreet, CNBC and internationally. He has also designed and traded option and futures strategies for prop trading firms and hedge funds as well as managed accounts.

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