For the markets, every action taken by the US and the FED governs the financial markets. The US elections and interest rate decision, which can create serious volatility, are ahead of us. In the past, Covid, Russia's invasion of Ukraine, the hawkish actions of the Japanese central bank and the Iran-Israel tension, which increased the demand for hedging options and option premiums, have significantly contributed to VIX option prices.
Especially this month, according to the latest survey conducted by US Bancorp with approximately 1,000 financial leaders, approximately 60% of corporate finance managers said that their appetite for hedging has increased due to political risk related to the election.
Frankly, when I look at the market, I am struck by both the high VIX options and the high indexes. For now, on the volatility side, the difference between how much stocks are expected to fluctuate and how much they actually move has widened to levels seen in crises. This shows us investors' desire to take a hedging position as stated in the survey and the possibility of a large volatility. The US presidential election, earnings season and upcoming events such as interest rate decisions also contribute to the spread.
Positive spread differences usually occur when the VIX is trading at high levels in the market. As a result, investors start to hold options for longer terms. Although we often see declines in the VIX side and increases in the indexes in the short term when the spread opens, these have generally appeared as buying opportunities in the past and we have seen significant increases afterwards. For now, while uncertainty is increasing, it makes more sense to keep the risk at a certain level, benefit from the index returns and then turn to hedging options instead of taking unnecessary risks.
European stocks and US futures fell after the sharp decline in crude oil prices. This situation also negatively affected the energy sectors after Israel withdrew its threats against Iranian energy facilities. The Stoxx 600 index fell 0.2%, reversing its previous rise. TotalEnergies fell 4.2%, while BP fell 4.4%. Brent crude oil prices fell below $75 per barrel after the Washington Post reported that Israel did not plan to attack Iranian oil or nuclear facilities. Meanwhile, the IEA predicted a glut next year. U.S. market futures fell as the S&P 500 reached its 46th record high in 2024. Nasdaq 100 contracts fell 0.2%. Nvidia and Advanced Micro Devices fell in premarket trading after reports that Biden administration officials discussed restricting shipments of advanced AI processors to some countries. The first of the third-quarter financials released last week showed that corporate America is benefiting from low interest rates early in the Fed’s easing cycle, according to BofA strategists.
There is some pause in gold. I had said it could ease towards 2610-2590. Last week, 2603, or 2590-2610, supported the 2603 level of our region. From there, it started an upward move again. It reacted from 2603 but could not sit above 2655. It made some flexes during the session yesterday but closed below the falling one. Therefore, let's separate the short term from the long term. First of all, the ounce gold daily chart will keep the dynamic targets of 2711 - 2817 on the table unless 2550 dollars are broken in the medium - long term. This is a medium-term strategic perspective. If I come to it as a trading, this chart may lean to the right a little more in the 2655 and 2620 - 2610 region and receive a relatively horizontal pressure. Here, especially if we are doing short-term long trade, we should be careful below 2610. With the excuse that a correction is coming towards 2580 - 2550. If you say you are doing short trading, you should not insist on shorting even if it exceeds 2655 - 2680. I explained it both as trading and as a classical technical analysis. I hope I could explain it.
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