"It's the holidays, I guess" -Del Griffith 9-day $VIX In Focus
It’s that time of year. Equity markets are often quiet while bond traders are sometimes caught napping on the trading floor. Thanksgiving is historically quite bullish – Stephen Suttmeier at BofA points out that in all years going back to 1928, the S&P 500 has outperformed over this period (markets are closed Thursday, and Friday is an NYSE half day). The average return during Turkey Day week is 27 basis points with the median gain being 0.36%. Returns for the balance of the year are usually strong, too – up 1.4% on average with a 70.5% positive rate.
It’s indeed a sanguine stretch, and I refer investors to the 9-day VIX. This short-term volatility index is the lesser-known version of the 30-day VIX. Making my Monday morning chart rounds, I noticed that the 9-day VIX is just a smidgen from fresh 52-week lows. Zoom out the chart further back, and you’ll see that this volatility gauge doesn’t get a whole lot lower from here. The point? Don’t expect much action on Wall Street this week.
I encourage traders to turn their collective attention to the end of next week and the first trading day of December. That is when we get the first major economic data point for November – the ISM Manufacturing survey. Given a weaker turn in the labor market and last week’s Retail Sales report for October that showed a softening consumer picture, I expect more signs of macro weakness to reveal themselves. Be advised that the November Nonfarm Payrolls report does not come until Friday, December 8.
It’s indeed a sanguine stretch, and I refer investors to the 9-day VIX. This short-term volatility index is the lesser-known version of the 30-day VIX. Making my Monday morning chart rounds, I noticed that the 9-day VIX is just a smidgen from fresh 52-week lows. Zoom out the chart further back, and you’ll see that this volatility gauge doesn’t get a whole lot lower from here. The point? Don’t expect much action on Wall Street this week.
I encourage traders to turn their collective attention to the end of next week and the first trading day of December. That is when we get the first major economic data point for November – the ISM Manufacturing survey. Given a weaker turn in the labor market and last week’s Retail Sales report for October that showed a softening consumer picture, I expect more signs of macro weakness to reveal themselves. Be advised that the November Nonfarm Payrolls report does not come until Friday, December 8.