Given the failure of the “RISK OFF” trade to develop any serious downside momentum this week, I am using the dip this morning to take a small profit on my S&P 500 ETF (SPY) puts. We had every reason to go down, given the Standard and Poor’s threatened European debt downgrade on Monday night. If [...]

I am pulling the plug on my short position in the Euro here, selling my Euro ETF (FXE) January, 2012 $134 puts at cost. It’s not that I have suddenly fallen in love with the beer drinkers and the garlic eaters. This is an option driven decision. With market volatility falling across all asset classes, [...]

Take a look at the charts below, and you will see what prompted me to knock out some shorts on the S&P 500 (SPY) on Friday. The longer the current trading range in the index works, the more traders pile into it, confining it to an ever narrowing range. I am even hearing that fundamental [...]

I heard the magic words today from German chancellor Angela Merkel and French president Nicolas Sarkozy: “treaty changes”. That will be the gist of their joint proposal at the European summit this coming Friday to deal with the sovereign debt crisis. To me, this means that the two besieged leaders are finally biting the bullet [...]

The November nonfarm payroll came in at 120,000, better than the consensus. The unemployment rate plunged an eye popping 0.5% to 8.6%, the lowest level in 32 months and one of the sharpest contractions on record. Some 140,000 private jobs were added, bringing the 32 month total to an even 3 million, an impressive feat [...]

Much of the fury in yesterday’s nearly 500 point “melt up” in the Dow was generated by hedge funds panicking to cover shorts. Convinced of the imminent collapse of Europe, the impotence of governments, and the death spiral in sovereign bonds, many managers were running a maximum short position at the Monday opening, and for [...]

The world’s major central banks launched a coordinated attempt to restore liquidity to the financial markets today, sending risk assets everywhere flying. The group moved to substantially lower interbank dollar swap rates, from 100 to 50 basis points. These swaps involve Federal Reserve dollar deposits with the European Central Bank and offsetting ECB Euro deposits [...]

Mark Fisher of MBF Asset Management and Dennis Gartman of the eponymous Gartman Letter joined forces today to launch a new exchange traded note, or ETN, that promises to capture the “RISK ON” trade. The instrument is designed as an improvement over the old Volatility Index ETF where traders attempted to capture short term market [...]