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BOOK YOUR FREE STRATEGY SESSION NOW >>Over the last few days, the majority of the markets were in an overall upward trend.
For example, stocks and bonds were both rising, in spite of their inverse relationship. The energy and metals markets also rose (with some exceptions), together with cryptocurrencies.
Watch the video to get an overall picture of market trends, volatility, and the upcoming rollovers!
Hi guys, and welcome back to our weekly chat about market trends, volatility, and rollovers.
So let's go and see what happened in the markets over the last 5 days.
Let’s start with stock indexes. Well it was a positive week for these markets, which are all recovering from the downward trend that took place two weeks ago. They have been rising for almost ten days now, so it really seems that their general trend is now upwards.
At the same time, bonds have also gone up, and this is pretty unusual. I mean, generally, bonds and stocks have an inverse relationship, so it's quite unusual to see both of them rising.
The energy markets continue to rise. Look, for example, at RBOB Gasoline. Over the last week, it reached significant highs. And the same thing goes for other energy markets such as Heating Oil, Crude Oil, and Natural Gas.
As for the metals market, there's a surprise. In fact, after a period of weakness, the metals have started to rise. Here you can see Copper, which has risen quite a lot over the last 5 days, and Silver and Platinum have also gone up. The only exception here is Gold.
Among the worst markets, there are the Soft Commodities, which are all negative except for Coffee, and the Cereals, which have also been negative, I mean at least as a whole.
Let's take a look at currencies. You can see that Euro-Dollar has gone from 1.15 to 1.16. And then here's something very interesting: Bitcoin and cryptocurrencies. This week the whole cryptocurrency market has been very lively. In addition to Bitcoin, there were other smaller cryptocurrencies on the rise, including BNB and, in particular, Dot, which has risen by almost 20% over the last 7 days.
Now let's take a look at the volatility of stock indexes. As you can see, short-term volatility is still very high; it is at the hundredth percentile. We can see it also from the standard deviation. As you can see in this chart in the lower part of the screen, it is the highest over the last 30 days.
By the way, it is also pretty high over a long time horizon. The reason is that, due to the last downward trend, there was an expansion in ranges. Contrary to historical volatility, the situation of implied volatility is quite different. As mentioned last week, the market didn't seem to be particularly worried by that downtrend. In fact, we've never entered backwardation.
VIX has returned to very low values and the stock market situation seems to be very calm at the moment.
Let's move on to rollovers. On Friday, we rolled Crude Oil, which expires on October 20, but as usual the rollover occurs a few days in advance. Natural Gas, Heating Oil, and Gasoline will follow as usual.
Finally, I'd like to remind you that next week, on October 20, the VIX Future will also expire.
Well guys, our weekly chat about the markets is over!
If you want to know more about the trading method we use at Unger Academy, the one that was developed by the only 4-time world trading champion Andrea Unger, I invite you to go and watch his webinar. You can find the link in the description of this video.
It’s all, goodbye everybody and see you next time!
We'll help you map out a plan to fix the problems in your trading and get you to the next level. Answer a few questions on our application and then choose a time that works for you.
BOOK YOUR FREE STRATEGY SESSION NOW >>Hi, I'm Francesco Placci, a professional trader since 2005 thanks to the systematic approach to the markets.
My skills range from trading on index futures to bonds, from stocks to commodities, with a particular focus on volatility and options, which I consider to be among the most versatile and fascinating instruments available to traders.
After an experience with leading Italian credit institutions where I learned the basics of institutional finance, I became a successful independent trader, with great personal satisfaction.
Founder of Algoritmica.pro, in 2019 I joined Unger Academy as head of Research and Development.
