T3’s Take 3: Volatility Is Back in a Big Way


T3’s Take 3: Volatility Is Back in a Big Way

Interested in becoming a professional prop trader?

Click here to fill out our eligibility form.


1) Bulls Give Back

Yesterday, the S&P 500 rose 1.5%, the first 1%+ up day since July 8.

The bears got their revenge today as the index dropped -1.5% to 2126.78, with the VIX rising 17.7% to 17.85.

Market observers were scrambling to find explanations for the sell-off, but for me, the story remains the same: we are seeing a good old-fashioned return of volatility after 2 months of markets going nowhere.

Some folks are pointing at deterioration in US economic data – but that’s nothing new.

The real question is what’s next?

There are no easy answers, but crude oil will be in focus tomorrow given inventory releases today after the close (from the API) and tomorrow morning (from the EIA).

2) Apple Booms on iPhone Sales Chatter

Apple (AAPL) was a superstar amid a sea of red, rallying 2.4% to $107.95.

Early this morning, T-Mobile (TMUS) Chief Executive Officer John Legere Tweeted that iPhone 7 pre-orders set company records.

Sprint (S) CEO Marcelo Claure then jumped into the news flow and added that iPhone pre-orders were nearly 4X higher than last year’s.

Consumers appear to be upgrading their iPhone at a faster-than-expected rate, and Apple may also be benefiting from a stumble by a key rival Samsung.

Samsung recalled Galaxy Note 7 smartphone due to exploding batteries, which certainly tilts the iPhone vs. Galaxy debate in Apple’s favor.

3) VIX-Plosion Trade Update

On August 9, I went long VIX calls, based on my expectation that the VIX could break over 30 within 2 months.

We may now be seeing the seeds of such a move, so I don't have plans to lock in profits just yet.

On Friday, we had the first -1% down day in the SPX since June 27.

Yesterday, we had the first 1% up day since July 8.

And today, the SPX fell  -1.5% with the Russell 2000 down -1.9%.

The Nasdaq was ‘only' down -1.1%, but that's largely because of Apple’s (AAPL) rally.

So it looks like the summer snoozefest has officially made way for some autumn excitement.

Wednesday’s Trading Calendar

US Economics (Time Zone: EDT)

07:00 MBA Mortgage Applications (9/9): prior 0.90%
08:30 Import Price Index MoM (Aug): exp. -0.10%, prior 0.10%
08:30 Import Price Index YoY (Aug): exp. -2.20%, prior -3.70%
10:30 DOE U.S. Crude Oil Inventories (9/9): exp. 4000k, prior -14513k
10:30 DOE Cushing OK Crude Inventory (9/9): exp. -100k, prior -434k
10:30 DOE U.S. Gasoline Inventories (9/9): exp. -1100k, prior -4211k
10:30 DOE U.S. Distillate Inventory (9/9): exp. 1500k, prior 3382k
10:30 DOE U.S. Refinery Utilization (9/9): exp. -0.35%, prior 0.90%
10:30 DOE Crude Oil Implied Demand (9/9): prior 17600
10:30 DOE Gasoline Implied Demand (9/9): prior 10250
10:30 DOE Distillate Implied Demand (9/9): prior 4655.9

Global Economics

04:30 GBP Average Earnings Index
04:30 GBP Claimant Count Change
04:30 GBP Unemployment Rate
18:45 NZD GDP q/q
21:30 AUD Unemployment Rate


Before Open:

Cracker Barrel Old Country Store (CBRL)

After Close:

Apogee Enterprises (APOG)