Oct 10. “Everybody has a plan until they get punched in the mouth.” Mike Tyson

–Going into the Columbus Day weekend, equity market turmoil is becoming the dominant theme.  Russell 2000 and German DAX have traced similar patterns, with small caps in the US leading the downside, and DAX having decisively cracked through several old lows around 9000 (now at 8825) to define a top.  While HYG did not make a new low, JNK did, suggesting further weakness in high yield credit markets.  Oil is off more than 20% from Russia/Ukraine inspired highs in July; down over $2 yesterday and this morning is below $85.  The complete reversal of the stock market rally after Wednesday’s minutes presages further volatility.  This thing’s shaking like the old Tacoma Narrows Bridge…http://on.aol.com/video/the-original-tacoma-narrows-bridge-collapse-of-1940-119995718
–October midcurve options expire today, though open interest is relatively small in calls just at or above the market.  Short Oct (red) 9912c have the most at 37k, yesterday’s high in EDZ5 was 9914.0.
–Somewhat surprisingly, the eurodollar curve from reds back flattened, with red/green at a new low of just over 90 bps.  Red/gold pack spread closed down 2.25 at 172.
–Floor closed for interest rates on Monday.  I will be in for a few hours Monday morning.

Posted on October 10, 2014 at 5:14 am by alexmanzara · Permalink
In: Eurodollar Options

Leave a Reply