The AI rally extended and volatility eased: the account rose 1.23%
On Tuesday the technology sector extended its rebound on renewed AI momentum. QQQ rose 1.27% to 721.25 and the Nasdaq-100 1.29%, while the S&P 500 gained 0.60% and the equal-weight S&P 500 only 0.11%: the advance was again concentrated in the largest technology companies. Details of Anthropic's planned IPO supported chipmakers for a third session: Broadcom rose 4.00% on reported bank financing for purchases of its technology for Anthropic, Tesla gained 4.04%, Amazon 1.61% and Alphabet 1.19%. Meta Platforms fell 1.64% after enlarging its equity raise, and Microsoft slipped 0.24% ahead of its results. The two-day Fed meeting began; CME FedWatch pointed to rates being held at 3.75–4.00%. The Conference Board consumer confidence index rose to 91.7 from 84.2. The 10-year Treasury yield eased to 4.99% and the 2-year was 4.70%.
Volatility declined for a second session. VIX fell 0.87 points to 17.52 and VXN 1.49 points to 24.91; 30-day QQQ implied volatility (own calculations) eased from 22.97% to 21.74%, and the skew index from 29.3 to 27.6. VIX/VIX3M closed at 0.895 (prior 0.922); on the Convexa scale the regime stayed Normal. The front of the curve stayed richer: ATM implied volatility for the 30 October weekly expiry was 26.42%, against 21.65% at 30 days, as the market priced a premium for the Fed decision and the mega-cap results. QQQ closed 0.93% below the model zero-gamma level (728.00), so the negative-gamma modifier remained.
The account closed the session 1.23% higher, against a 0.56% gain in SPY. The main contribution again came from the lower side of the options structure, which gained as the market rose and implied volatility and skew declined. The upper side of the structure worked against the account as QQQ rose and offset part of the gain; the expired short-dated protection was replaced with new protection covering the Fed decision day. Week to date (26–30 October) the account was up 12.47% (SPY +1.28%); month to date it was down 28.22% (SPY +0.92%), and since the start of the public record on 5 August the result was +10.46%, against +0.01% for SPY.
At the close the weekly QQQ straddle priced a move of ±1.91% to the Friday 30 October expiry (range 707.47–735.03), down from ±2.32% a session earlier. Ahead were the Fed rate decision on 28 October at 14:00 ET with the press conference at 14:30 ET, Microsoft and Alphabet results that evening, the advance estimate of third-quarter GDP, PCE data and jobless claims on 29 October at 08:30 ET, Amazon results after the close on 29 October, and the Chicago PMI and weekly QQQ expiry on 30 October. Apple reports on 2 November after the close.
Editor’s Note reflects the author’s market perspective at the time of publication and should be read as commentary, not investment advice.