JLN Options: Yellen gives the green light for more stock gains; Weekly Market Commentary 6.20.14; Financial markets: Calm before the storm?

Jun 20, 2014

Lead Stories

EDITOR’S NOTEIt was a weirdly slow news day.  These things happen.  Have a good weekend and hopefully after that some news worth reading will be made (I know…careful what I wish for, I just might get it).

Yellen gives the green light for more stock gains
Luciana Lopez and Jennifer Ablan – Reuters
Federal Reserve chief Janet Yellen signaled that rational exuberance is just fine.
That, at least, is how some of America’s largest money managers interpreted her comments on Wednesday suggesting interest rates will remain low through 2016.

Weekly Market Commentary 6.20.14
Larry McMillan – CBOE Options Hub
Once again we see that nothing really can stop this bullish market.
This week, there were three separate pieces of news/data that
theoretically could have done so, but they had little effect.
So $SPX is now trading at new all-time highs. The “old” support
level at 1900 is still in place, and now there is support at 1925
(last week’s lows).

Financial markets: Calm before the storm?
Russell Hotten – BBC News
All the indicators are telling us that the temperature is just right.
Stock markets have steadily climbed to new records, but haven’t seen such low volatility for years.
Daily stock market movements of, say, more than 1%, have been pretty rare recently among the leading indexes.
It’s a similar story in the currency, bond and commodity markets.

Should Dow Investors Fear the Quadruple Witching Hour?
Dan Caplinger – The Motley Fool
Today is looking an unremarkable day for the stock market, even as major U.S. indexes push their all-time highs. As of 1:15 p.m. EDT, the Dow Jones Industrial Average was up just 24 points. One factor that many Dow investors are watching closely is the so-called “quadruple witching hour,” which is set to occur this afternoon. Yet should you really be concerned with this occult piece of market jargon? Let’s take a closer look at what quadruple witching is and what it means for your investing.

More all-time highs on the way? 
David Bartosiak – Zacks.com
Today marks the 22nd time this year that we’ve hit an all-time high on the S&P 500. Trading as high as 1963.91 intraday the broad market index looks poised to hit another closing high. Those of us that look for correlations between the S&P and other financial instruments are seeing some parts that are very ordinary and other correlations that aren’t making much sense.

RBI Eases Norms for Foreign Investors in Currency Derivatives
Outlook India
To enhance the depth of the foreign exchange market, the Reserve Bank today allowed foreign portfolio investors to participate in the domestic exchange-traded currency derivatives.
At the same time, domestic players like exporters and importers would now require underlying exposure if they position beyond USD 10 million.

The Volatility ‘Surge’ Facing the Oil Sector
Options volume has surged on oil ETFs, but does it matter?
Adam Warner – Schaeffer’s Investment Research
With the CBOE Volatility Index (VIX) now under 11, and July 4 only a couple of weeks away, it’s pretty safe to ignore the stock market for a couple weeks. Or so it seems.
But hey, there’s certainly some interesting pockets out there, like energy for example. Bloomberg highlights some action in the United States Oil Fund LP (ETF) (NYSEARCA:USO):

Videocast: VIX July calls surge

Dow hits new intraday high on volatile Friday; Oracle weighs down tech
Deborah Bacal – Proactiveinvestors (NA)
U.S. stocks rose on Friday with the Dow Jones Industrial Average surging to a new all-time intraday high, approaching the 17,000 level. Today brings quadruple witching, the expiration day for stock index futures and options, single stock options and futures, which can boost trading volumes and volatility.


NYSE Governance Services Announces 2014 Leadership Award Winners
Press Release (ICE)
New York Stock Exchange Governance Services, a subsidiary of Intercontinental Exchange (NYSE: ICE), today announced the winners and finalists of its inaugural Governance, Risk & Compliance Leadership Awards. The awards program recognizes exemplary leaders in governance, risk and compliance.
“Corporate governance plays a large role in dictating a company’s success as well as a board’s contribution to long-term value, which is why we are so excited to recognize outstanding companies and individuals who have gone above and beyond the basic requirements of governance, risk, and compliance with our Leadership Awards,” said Jean-Marc Levy, Senior Vice President and Head of Global Issuer Services at NYSE.

Regulation and Enforcement

New Evidence Shows Insider Trading Is ‘Pervasive’ and Rarely Punished
John Grgurich – The Fiscal Times
Three in a trillion–those are the odds average investors face in randomly buying a stock option that perfectly — and therefore profitably — coincides with an unannounced corporate merger or acquisition. Yet those types of transaction are far more common — “pervasive,” even, according to a new study, which suggests, “Informed trading is more pervasive than would be expected based on the actual number of prosecuted cases.”

House Dem: CFTC bill would be ‘sowing the seeds of future disaster’
Cristina Marcos – TheHill
Rep. Louise Slaughter (D-N.Y.) argued Thursday that the Commodity Futures Trading Commission (CFTC) measure on the floor this week would lead to another economic crisis.
The bill, H.R. 4413, would reauthorize the agency through 2018 and includes other provisions to reform its regulatory process.


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