The Kerry Effect

Midday Update – The Kerry Effect

Markets have been in a lull for most of the day as volume remains light heading into the holiday weekend. Despite a slew of economic indicators this morning, $SPX is just mildly lower and has traded in a tight range for most of the day… until VP John Kerry took the podium. While Kerry offered little “new news,” the speech felt like a precursor to a military strike, though no actual progress was made in Kerry’s remarks to suggest an attack is imminent. Nonetheless, Kerry’s words injected an element of volatility that caused a violent swing in the $SPX and $VIX. The Nasdaq has taken it on the chin today as most technology bellwethers are in the red on the day including $AAPL, $GOOGand $AMZN.

SPX

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VIX

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We have made just one intraday move thus far, peeling off our $AAPL weekly calls for a loss as the market has committed to the downside. $FCEL remains our strongest position on the day, rising as much as 5.8% on heavy volume and we would expect the Syrian situation could be a catalyst for the stock as alternative energy stocks may come into focus. We wouldn’t rule out $TSLA as a bounce candidate next week, as some have speculated that rising oil prices is bullish for the electric car industry, though we question the validity of that conjecture given the minimal penetration of electric cars thus far. Still, perception is often reality, and we trade the market we are given, not the one we desire.

Overall, Kerry’s comments left markets more or less unchanged, but uncertainty remains high. While we will keep our eyes peeled for opportunities heading into the weekend, there are unknown variables that could play out in the coming days that will make it difficult to position ourselves one way or the other.

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Posted on August 30, 2013, in Uncategorized. Bookmark the permalink. Leave a comment.

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