JBLU and Crude: Inverse Trade

JBLU: Black; Crude: Blue.

Crude declined in October-Dec in 2004 and 2005 in the last quarter of the year.

At the same time, JBLU rallies higher. Although, early in the fall trade worth a look and accumulate on weakness with exit at 9. Continue to build on strength towards $12-14 level.

Of course JBLU has company specific risk while crude has began its summer correction.

NVDA: near-term short

NVDA: Short closer to the 22 -23 level given a strong run in the near-term. A tech name that offers high beta

• Momentum weakness : following a strong recovery since the summer lows, watch for recovery stalling
• Above both 200 and 50 day mva.
• Rally on weak volume
  

Volatility- worth a look here in September

VIX and VXN : Following turbulent sell off’s in May both volatility indexes continue to decline. This behavior illustrates low implied volatility, creating bargain opportunities in the option markets. (Note: calendar spread might be a timely strategy- will follow up this week- buy longer duration and high volatility with shorter timeframe).

“The last time the absolute pricing of implied volatility was as low as this was in 1993, but interest rates were much lower then, 3% instead of 5%. Since options have been listed, I don't think there's ever been this kind of opportunity on a relative basis between option pricing and interest rates. The bear market was a long time ago -- four years ago -- and the market hasn't had a 10% decline in over three years, and people have gotten a little lazy and forgotten what it's like to have a downturn” – Barrons article.