By Lawrence G. McMillan
Recently, the “Skew Index” published by the CBOE shot upward, creating discussions around the option trading community as to its meaning. In the feature article, we take an in-depth look at whether a high $SKEW reading should call for caution in the stock market.
The state of our market indicators remains about the same (page 6). We remain bullish as long as $SPX continues to close above 1810.
One page 7, there are two items: the first is that we are finally able to announce the winner of our MF Global contest, since the bankruptcy has been settled for 100% of the claims made. The second is some further forecasting for 2014, based on it being a year ending in “4,” as well as the mid-year between Presidential elections.
The January Early Warning System was a loss this year (page 78).
On page 9, there are trades in The Gold ETF (GLD), Disney (DIS), and Cocoa futures.
Finally, on page 12, we continue to recommend the calendar spread in $VIX futures, provided we can enter at our limit.
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