Bifurication

Today we saw a massive sell off in the tech-weighted NASDAQ , with the NDX down over 2% at one point. It closed down about 1.6% while the DOW registered an all time high, the RUT was up again (+1.5%), and the SPX rose! Investors seem to be re-positioning portfolios after the Trump victory. Defense companies and certain commodities are really moving higher. Someone tweeted that the Relative Strength Index on copper hit 99 today - the highest in 36 years. Meanwhile, technology is suffering as M&A deals (like AT&T/Time Warner) may get more scrutiny under Trump.

VXST finally closed below the VIX today, and was the only vol index down on the day. VIX can fall much further from here after its VIX spike buy signal. We may have a slow down in the uptrend on the SPX, but the market looks like it will go higher.

Put/Call Ratios have been high recently, as has the SKEW. When they fall, more bullishness in the stock indexes will follow. The RUT has been the most bullish and that is a good sign.

Some option traders are throwing on bear call spreads at this point, but I am not following that yet. I have the one 2210/2220 Dec2 SPX call spread on, and I may have to roll it over to a bull put spread if the market looks to go higher.

Meanwhile, I moved the NDX 4720/4710 put spread set to expire today out to Nov17 for an additional credit of 40 cents. I also added a put spread at 2155/2145 Nov14 SPX for 75 cents today. These are both rather small positions to hedge the one big call spread I mentioned above.