Given this week’s holiday-shortened schedule and thin global market activity, liquidity will likely be even more limited. Moves could become exaggerated due to lower participation and limited news flow.
The Dow broke its 10-day losing streak today; however, the bad news is it only finished the day up 0.04%. So, while the streak was broken, it was just barely.
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Stocks did start the day higher, but the market had given back all its gains by the day’s end. From a technical standpoint, it worked out better than I could have imagined.
Stocks finished the day higher, embarrassingly invalidating the 2b top pattern I thought had formed yesterday. It was a somewhat questionable move higher, with most gains occurring overnight during a low-volume, low-liquidity session.
Stocks closed flattish on Friday after a weaker-than-expected University of Michigan report showed that consumer confidence plunged and inflation expectations rose. The report caused a rather sharp reversal in risk assets, while rates pushed higher.
Stocks finished the day lower despite an early morning rally attempt. The S&P 500 finished down by almost 60 bps to close at 5,022. The index is nearing that all-important 5,000 big gamma level heading into Friday’s OPEX.
A few months ago, I analyzed the total performance of the three most popular S&P 500 covered call ETFs in 2023: the JPMorgan Equity Premium Income ETF (ARCA: JEPI), the GlobalX S&P500 Covered Call ETF (ARCA: XYLD), and the NEOS S&P 500 High Income ETF (BATS: SPYI).
The stock market today finished higher. It was an entertaining day, especially if you understood the background of the sudden and “unexpected” rally, especially heading into OPEX tomorrow
The Nasdaq 100 Enhanced Options Income ETF (QQQY) fund has done well in the past three months as demand for zero day-to-expiration (0DTE) options rise.
It is quite possible that the current level of VIX is too depressed compared to the correlation of its components, with mechanical selling by ETFs as a contributing factor.
Last year, which was brutal for stocks, these ETFs fell less than the broader indexes. This year, however, stocks have staged a very impressive rally, and these funds are lagging.
