A New Market Maxim?


The Russell 2000 (RUT) cash index with 240 day simple moving average

The RUT traded to the 240 day simple moving average and closed above it by a nickle on Thursday. Friday, it traded below it briefly to scare the chickens and then traded strongly the remainder of the day. The VIX term structure below shows that, if anything, put sellers were hard at work but for less money than they would have realized in years past. Retail put sellers complain that the premium they receive for their offerings of insurance is much less than in years past. With even Warren Buffet in the put selling game, there is no wonder. So do we now have two trading maxims? The old: when the shoe shiner speaks of stocks, sell them. And the new: so long as giants are selling puts, we might has well buy them?


VIX cash and futures structure



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