Editor's Note

Technology steadied, but the account fell another 4.21%

On Friday the technology sector steadied after Thursday's sell-off. QQQ closed at 704.40 (−0.01%) and the Nasdaq-100 was unchanged, while the S&P 500 fell 0.52% and the equal-weight S&P 500 0.77%: the pressure shifted to other sectors. Among the largest companies, Microsoft rose 0.66%, while Alphabet, Meta Platforms and Amazon lost about 1%. Oil extended its rise after attacks in Saudi Arabia, the S&P Global flash PMI showed the fastest increase in selling prices since August 2022, and the 10-year Treasury yield rose 4 basis points to 5.00%.

Volatility moved in both directions. VIX rose 0.42 points to 19.45 and VXN fell 0.42 points to 28.30; 30-day QQQ implied volatility (own calculations) eased from 25.49% to 24.91%, while the skew index rose from 29.3 to 31.4. VIX/VIX3M closed at 0.9497, just below the Tense threshold of 0.95; on the Convexa scale the regime stayed Normal.

The account closed the session 4.21% lower, against a 0.52% decline in SPY. Short-dated protective options lost most of their value, and the short long-dated puts rose in value as skew increased; gains on the short calls offset only part of the loss. During the session the lower side of the structure was adjusted and the expired protection was replaced. For the week of 19–23 October the account was down 18.83% (SPY −0.43%) and month to date down 36.17% (SPY −0.35%); since the start of the public record on 5 August the result was −1.79%, against −1.25% for SPY.

At the close the weekly QQQ straddle priced a move of ±3.09% to the Friday 30 October expiry. The week ahead held the Fed decision on 28 October at 14:00 ET, Microsoft and Alphabet results that evening, the advance estimate of third-quarter GDP and PCE data on 29 October, and Amazon results after the close on 29 October. The Fed remained in its blackout period through 29 October.