Monthly Archives: April 2013

Associated Press Twitter account Hacked

The chart below is a two minute chart of the SPY on 04-23-2013. The Associated Press’s Twitter account got hacked and someone tweeted that the White House had been bombed. The Dow Jones Industrial Average dropped 145 points and recovered in about 7 minutes. The SPY is shown below, on a two minute chart the down move was over 30 standard deviations as shown on the red bar. This was an excellent example of the kind of market volatility that one tweet can produce, even though it turned out to be false.

SPY 04-23-13 AP Twitter hack (1)

Netflix Stock Post Earnings

The chart below is Netflix, NFLX, stock after their earnings report yesterday. The up move was over 7 standard deviations as shown on the red bars below the price chart. The line on the bottom is the ratio of the implied volatility to the statistical volatility which has dropped to 204.30 post earnings. We discussed NFLX on my radio show, Ken’s Bulls and Bears report with Jeffrey Dow Jones a couple of months ago.

NFLX 04-23-2013

Chart of the day IBM

Today’s drop in the price of IBM following a weaker than expected earnings report. Currently the down move is over eight standard deviations as shown on the red bar. The line below is the IV/SV ratio which is up to 208.65.

IBM 04-19-2013

Breakout in Natural Gas

The chart below shows today’s breakout in natural gas. UNG is up over 30% year to date. Today’s price move shown in the red bars is over two standard deviations. The bottom line on the chart is the ratio of the implied volatility to the statistical volatility, IV/SV ratio. I have talked about nat gas on my radio show, Ken’s Bulls and Bears report quite a bit this year and have been recommending it as a long position. $UNG is a part of my ETF covered call model portfolio.

UNG 04-18-2013

Record Drop for Price of Gold

GLD 04-15-2012Chart showing yesterday’s drop in the price of gold. It was the largest drop in price ever in dollar terms. In percent terms the drop on 03-17-1980 was larger. Yesterday’s drop was over 9%. Measured in standard deviations it was a move of 6.62 standard deviations. With a normal probability distribution, 68% of the time price moves will be within one standard deviation, 95% of the time moves will be within two standard deviations and 99% of the time within three standard deviations. The red bars on the chart show the price moves measured in standard deviations and the lower line is the IV/SV ratio.

Skew - GLD - SPDR Gold Shares_window_screenshotSkew chart showing the implied volatility of gold (GLD) options after yesterday’s record day in dollar terms.