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Russell 2000 (^RUT)

Research on Russell 2000 (^RUT)

Inflation Data and AI Earnings Lead December Turnaround
Punk Rock Weekly

Inflation Data and AI Earnings Lead December Turnaround

Markets rebounded on Friday after a week of volatility sparked by a Fed rate cut and inflation fears. A softer-than-expected PCE inflation report restored confidence, suggesting the bull market remains intact. AI-driven earnings growth from firms like Nvidia and Broadcom continues to fuel optimism, while pro-business sentiment and record holiday spending boost market momentum. The dip proved to be a buying opportunity, with positive price action expected through the holiday season.

Opening Bell: Markets on Edge
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Opening Bell

Opening Bell: Markets on Edge

Following a turbulent day on Wednesday, the S&P 500 closed 0.77% lower at 5,867. The NASDAQ was slightly down by 19 points (0.10%), closing the day at 19,392. The Dow extended its losing streak marking the 11th trading session in the red finishing at 42,342 sliding 0.29%. The DXY weakened a bit to 107.97 (-0.39%) calming the market, and the VIX climbed 7.8% in early trading to 26. Small caps in the Russell 2000 are still hurting, down 1.31% during the day, closing the index at 2,231.

Keep Calm and Short the VIX
Trade Idea
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Black Swan Party

Keep Calm and Short the VIX

Understanding VIX behavior is crucial for traders. The VIX often reverts to its mode rather than its mean, making the mode a more practical target for trading. After the recent historic volatility event, the VIX has started to calm, suggesting a quieter September. With a focus on shorting VIX options, this article provides insights into capitalizing on the post-election volatility crush and the unique behavior of VIX European expiration options.

The Silver Lining to Last Week’s Market Rollercoaster: Small Cap Outperformance
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Black Swan Party

The Silver Lining to Last Week’s Market Rollercoaster: Small Cap Outperformance

Last week’s spike in volatility saw the VIX hit the $16 mark and significant market drops, but signs suggest a healthy sell-off and rotation from Tech. The VIX curve remained in contango, indicating an orderly market despite the sell-off. With earnings season approaching, index volatility typically decreases. The Russell 2000’s outperformance further supports a positive outlook, signaling resilience among smaller companies. Overall, the current market structure and strong economic fundamentals suggest that volatility may remain subdued.

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