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 Editor's Note: Below is a chart (and excerpt) from today's Early Look written by Hedgeye CEO Keith McCullough.

CHART OF THE DAY: After Oil Crashed 35% - zool

Here’s this morning’s quantified IVOL (implied volatility vs. 30-day realized) look on that: 

  1. SP500 has implied volatility trading at a -23% DISCOUNT to what’s been realized in the last 30 days
  2. TECH (XLK) has implied volatility trading at a -29% DISCOUNT to what’s been realized in the last 30 days
  3. OIL (USO) has implied volatility trading at a +38% PREMIUM to what’s been realized in the last 30 days 

In other words, AFTER Oil crashed -35% from the OCT highs, consensus is aggressively pushing PREMIUMS higher. Whereas AFTER every bounce in either the US stock market or Tech, consensus gets complacent. 

Again, this isn’t how the market “feels” … or how I want or need it to be positioned… it’s simply how the market IS positioned vs. where it USED TO BE positioned: 

A) 1-month ago, TECH (XLK) had an implied volatility PREMIUM of +22% (vs. 30-day realized)
B) 1-month ago, Oil (USO) had an implied volatility DISCOUNT of -5% (vs. 30-day realized) 

CHART OF THE DAY: After Oil Crashed 35% - 11.27.18 EL Chart