The Week Ahead
Happy Sunday,
A shame to see the USA kicked out of the World Cup, a great effort but not enough. Is it still soccer? On to Les Bleus and the Three Lions today.
Moving on… An interesting week to say the least - S&P closed up 1%, NQ up just shy of 2%, Dollar Index through its 200d down to 104.5, 10yr down 20bps and the VIX was sold for the 10th consecutive week now below 20. At long last, the S&P managed to break through the 200d moving average that everyone had become ever so obsessed with watching. CTAs are now net long, the largest since March time. Vols are in an area of calmness, believe it or not. With regards to vol, buy protection when you can NOT when you need it. Tactically speaking long vol here via a futures or options spread isn’t a bad idea. In my opinion, this vol compression is over-extended, or is the VIX trying to tell bears their worst nightmare?
Key US data this week:
Today, OPEC+ will hold a virtual meeting on its oil production
Relatively light week data wise, the Fed is now in its communications blackout period ahead of the 12/14 FOMC meeting.
Anyway… moving on to the week ahead