Bearishness winning

Today we saw a lot of selling pressure in the morning session again. As in the last two days, the bulls were able to come in the afternoon and push the SPX to close above the lows of the day, but still the market ended down.

The market forecast was is showing that tomorrow could be another down day. As volatility erupted to the upside today again, the SKEW actually fell again. All this is just really a choppy market in the range between 2120 and 2180 on the SPX. This could last awhile actually, even though it seems like the market has been range bound for so long already.

The RUT and the NDX fell more than the SPX, and they look like they could show more weakness before they rebound. 

Bulls in the afternoons

The market is fighting off selling with afternoon bullishness. We have seen that scenario for two days straight. The bullishness comes from the energy sector on news of a OPEC output limit. A lot of the bearishness is coming from news around DB in Europe. With earnings and an Italian constitutional referendum coming in December, we should have an interesting Q4.

Volatility has fallen farther today, while the SKEW rose a bit. None of the indicators are particularly providing a definitive bias to the market. Most are bullish, in general.

Our Sep28'16 SPX bull put spread at 2110/2100 closed way out of the money today. The trade earned 8% in the two days of its lifespan.

I am likely to put some more trades on this week, especially if the SPX comes up to 2180 by Friday. I am waiting for the Put/Call ratios to give a clear bias when this happens.

Pre-Debate Risk Off

Today the SPX fell over 18 points (-0.86%) on lighter volume than Friday. VIX closed up significantly, but still only at 14.5 or so. VXST is again higher than the VIX - a forewarning of more volatility to come. In the other hand, the SKEW actually fell to 121 however.

I sold the Sep28'16 SPX 2110/2100 put spread near the close for 80 cents. This two day trade is placed below the major support level at 2120, and about 3% off Fridays close. The market has to really react negatively to the debate in order to fall that far, as only unimportant economic data is on the cards for release tomorrow. Yellen will speak on Wednesday and that could roil markets a bit.