Morning Review - 080310

Nicholas Colas (Chief Market Strategist): 212 448 6095 or ncolas@convergex.
com
Christine Clark: 212 448 6085 or cclark@convergex.com
Beth Reed: 212 448 6096 or breed@convergex.com
Stocks advanced Monday (S&P 500 +2.2%, Dow +2.0%, Nasdaq +1.8%), with the S&P 500 and Dow Morning Markets Briefing
hitting 10-week highs, after better-than-expected news from both manufacturing and construction
spending reports and strong bank earnings out of Europe. This came after Wall Street recorded its best
Market Commentary: August 3rd, 2010
month in a year Friday, as strength in corporate earnings offset poor economic data. The ISM’s
manufacturing gauge fell to 55.5 in July from 56.2 the prior month, but came in ahead of expectations A snapshot of the markets through the
and marked a 12th consecutive month of expansion, as indicated by a reading above 50. Construction lens of ConvergEx.
spending rose 0.1% in June, compared with estimates for a 0.5% drop, with investment in public
projects offsetting a 15th straight month of declines in private nonresidential construction.
Lower the Asset Price Correlations, HAL
Summary: Our monthly review of asset price correlations finds little changed from last month’s record high levels, despite the impressive move in equities over the
period. Major S&P industry sectors have lost a bit of their commonality with the SPY ETF, but overall correlations there remain stubbornly high. Gold and silver,
traditionally delinked relative to equities, saw their correlations to stocks rise. In fixed income land, high yield corporate saw correlations spike to new highs in July, while
high grade bonds managed to maintain little link to stocks. The currencies we track – Aussie Dollar, Yen and Euro – did not see much of a move in their correlations, really
the only bright spot. The upshot here is that the binary “risk on/risk off” dynamic that has become the hallmark of trading across the spectrum of asset types continued –
and grew stronger – in July.
Spend enough time banging away at a keyboard, and pretty soon you’ll think you are a writer. At least that’s the experience I have had writing these daily notes
for about 18 months. You can collect your thoughts more quickly with practice. The words travel more speedily to the page in some form others can read and hopefully
find useful and interesting.
There is a website for aspiring writers of all types (not just market junkies) that takes this one step further – it will tell you what famous writer your style most
closely resembles. It is www.iwl.me, and you simply copy in some of your best stuff into a window and it will tell you what legendary scribe your pithy sayings most
closely mimic. Fancy yourself a new Wordsworth or Hemingway? The site will tell if you are closer to your heroes or, say, Charles Schultz, the author of the Peanuts
cartoons.
Market Commentary – Pages 1-5, Equities/Conferences & Earnings – Page 6, Fixed Income – Page 7, Options – Page 8, Exchange-Traded Funds/Indexes – Page 9, Social
Media & Internet Blogs Top Stories – Page 10
1
1
Nicholas Colas (Chief Market Strategist): 212 448 6095 or ncolas@convergex.com
When I plugged in last month’s review of asset price correlations and some other notes into “I Write Like,” the official name of the site, I got back “Arthur C.
Clarke.” For those of you unfamiliar with his work, his best known effort was 2001: A Space Odyssey. The story, which leveraged Clarke’s amazing facility in the realm
of science fiction, was co-written by Stanley Kubrick and made into book and movie simultaneously. Well, science fiction is not exactly what I know or like, but Sir Arthur
Clarke was a fantastically successful 20th century author so I will internalize the assessment as a positive.
But, in reality, there is something “other worldly” about the monthly correlation analysis we track for risk assets, and this month’s summary just reinforces that
theme. We all learn in school – whether that be undergrad, business school, or CFA Level 1 – that assets have different correlations to each other. They do not, generally,
move simultaneously in the same direction. If cyclical stocks rally, consumer nondurables go down. If gold spikes, bonds probably aren’t going to rip higher in price. That
lack of correlation allows asset managers to manage risk, since offsetting assets will lower portfolio volatility over time while maximizing return.
We are, for a variety of reasons, living in some alternative investment universe (call it “Bizarro Investment World,” if you are a Seinfeld fan) where, for the
moment, correlations are very high for a variety of asset classes. We noted this phenomenon is last month’s analysis, and in this month’s update we find little
diminution of the trend. In some areas it is actually accelerating. The following charts and tables have the data that support the following analysis:
• Among U.S. stock market sectors, correlations declined very modestly, but remain at near-record highs. Five of the ten industries we track still have
correlations to the S&P 500 of at least 95%, and the lowest correlations are around 83% (Utilities and Consumer Staples). Four months ago the lowest
correlations were 65-66% (Health Care and Utilities.
• Rising markets and lower expected volatilities (as measured by the CBOE Volatility Index, or VIX) do tend to push down the correlations among industry
sectors. However, even last month’s strong rally in U.S. stocks did little to reduce how much sectors move in tandem with the market overall.
• High yield bonds reached a new high for correlation with U.S. stocks. In contrast, high grade corporate bonds remained one of the least correlated asset
classes - a real bright spot in the analysis.
• Precious metals – we track gold and silver – both saw rising correlations to U.S. stocks in July. That is a reversal of a trend that started early in 2010, and
price movements in precious metals have become more tied to equity priced over the past 60 days.
• Currencies bucked the trend to higher correlations, at least among the Euro, Aussie dollar and Yen. In fact, the much maligned Euro is at 8 month lows in
terms of its relationship with U.S. stocks.
There is a pretty steady diet of explanations for increasingly correlated markets. Here are two of the more popular ones:
• One school paints the sector correlations as a function of High Frequency Trading (HFT). By most accounts this type of money management dominates the
day-to-day trading of U.S. equities. One strategy – the arbitrage of Exchange Traded Funds (ETFs) to underlying stocks – could partially explain why stocks and
sectors move closer to indices like the S&P 500. This is especially true, we suspect, in a rising market where the SPY ETF gets a significant amount of inflows
because investors want an easy, low cost, way to play the rally.
• Another explanation is that macroeconomic drivers such as
o Federal Reserve monetary policy
o A rolling set of concerns about sovereign debt risk
push money into and out of assets without much fine-tuning on considerations such as industry sectors or credit quality. If it is a “risk on” day, everything
works. If not, then nothing goes up.
We are sure there are other explanations – these two just come up the most.
2
I would only point out that there is a real price to pay for such high correlations. This isn’t science fiction any more, it is science fact.
The most dramatic development of the last 12 months is that retail investors have pulled cash out of U.S. equity mutual funds even though stocks have done
well. Some has gone into stock ETFs, yes. Far more, however, has gone into bonds. Investors, even if they have not learned it formally, understand that diversification
means lower correlations. As long as stocks, bonds, precious metals, and other assets all move in lock step, retail investors will most likely favor less risky assets.
Historical 30-Days Correlation Against S&P 500

Name Symbol Current 1 Month Ago 2 Months Ago 3 Months Ago Change in absolute correlation* Change in absolute correlation* Change in absolute correlation*
(07/30/10) (07/01/10) (06/10/10) (04/30/10) from 1 mo ago from 1 mo ago to 2 mos ago from 2 mos ago to 3 mos ago
Energy XLE 94.56% 95.17% 93.57% 81.60% 0.61 11.97 8.76

Health XLV 86.13% 93.66% 94.43% 66.50% 7.53 27.93 11.10
Industrials XLI 95.73% 97.74% 97.98% 92.93% 2.01 5.05 3.57
Utilities XLU 83.28% 88.31% 90.07% 65.98% 5.03 24.09 4.44
Consumer Staples XLP 83.14% 85.56% 92.70% 81.06% 2.42 11.64 1.91
Telecomm IYZ 90.93% 93.80% 94.12% 84.73% 2.87 9.39 19.49
Technology XLK 95.99% 95.84% 96.58% 91.16% 0.15 5.42 1.62
Consumer Discretionary XLY 95.25% 97.08% 97.35% 85.55% 1.83 11.80 3.65
Financials XLF 94.16% 95.02% 97.16% 91.75% 0.86 5.41 13.54
Materials XLB 89.96% 94.79% 95.15% 85.89% 4.83 9.26 11.54
Gold GLD 20.11% -16.47% -26.48% 8.57% 36.58 35.05 17.87

Silver SLV 43.19% 37.63% 25.58% 48.33% 5.56 22.75 1.43
EAFE Index EFA 92.15% 95.41% 94.43% 87.90% 3.26 6.53 10.99
Emerging Markets EEM 88.40% 95.55% 93.98% 88.57% 7.15 5.41 4.44
Australian Dollar FXA 86.78% 88.60% 82.97% 67.43% 1.82 15.54 2.82
Euro FXE 30.84% 45.60% 40.79% 41.32% 14.76 0.53 10.80
Japanese Yen FXY -50.33% -73.54% -72.75% -35.61% 23.21 37.14 14.09
High Yield Corporate Bond HYG 86.12% 80.59% 77.55% 53.34% 5.53 24.21 7.68
Investment Grade Bond LQD -13.35% -21.74% 14.30% -20.58% 8.39 34.88 34.54
*Red indicates increasing correlation; green indicates decreasing correlation
Source: IVolatility.com
3
Sector ETFs: Historical 30-Days Correlation Against the S&P 500 GLD and SLV: Historical 30-Days Correlation Against the S&P 500
100% 90%
95%
90% 70%
85%
80% 50%
75%
70% 30%
65%
60%
10%
-10%
-30%
Energy Health Industrials Utilities Cons Stpls
Telecom Technology Cons Disc Financials Materials GLD SLV
Currencies: Historical 30-Days Correlation Against the S&P 500 Bonds: Historical 30-Days Correlation Against the S&P 500
90%
80%
60% 70%
40%
50%
20%
30%
0%
-20% 10%
-40%
-10%
-60%
-80% -30%
Australian Dollar Euro Yen High Yield Investment Grade
4
Sector ETFs: High, Low & Avgerage Monthly Historical 30-Day

Correlations Against the S&P 500
100% 1200
95% 1150
90%
85% 1100
80% 1050
75% 1000
70%
65% 950
60% 900
High Average Low S&P 500
VIX vs. Average 30-Day Historical Correlation of Sector ETFs to

the S&P 500
100% 35
33
95% 31
Correlation = 0.61 29
90%
27
85% 25
23
80% 21
75% 19
17
70% 15
Avg Correlation VIX
5
U.S. EQUITIES
JP Morgan upgraded KO (+2.4%) to “Overweight” from “Neutral,” citing strength in emerging markets and likely improvement in developed markets.
Shares of F rose 3.1% after news the automaker completed the sale of its Volvo unit to China’s Geely for $1.8 billion. V (-1.5%) and MA (-3.6%) declined
following reports that T (+2.5%) and VZ (+1.7%) are working together to encourage customers to use smartphones as a payment system, rather than
relying on debit and credit cards. GE (+1.8%) and INTC (+2.7%) announced a technology-focused joint venture to help lower medical costs by remotely
delivering health care to elderly patients with chronic conditions.
Important Earnings Today (with Estimates) From…

S&P Futures
ACOR: $-0.46 CBS: $0.21 DTG: $1.16 JAH: $0.74 PNW: $0.87
One Day (High –1124.25; Low – 1101.75):
ACF: $0.42 CHK: $0.69 DOW: $0.56 LEAP: $-0.23 PG: $0.73
APC: $0.36 CLX: $1.20 DHI: $0.16 LEA: $1.30 SRE: $0.82
ADM: $0.50 COH: $0.56 DUK: $0.28 MRO: $0.82 SII: $0.24
ATLS: $0.04 CTSH: $0.52 EMR: $0.68 MMC: $0.44 SPR: $0.42
AXS: $1.18 DF: $0.25 GET: $-0.25 MA: $3.33 STE: $0.45
BHI: $0.43 DNDN: $-0.50 HRS: $1.24 MGM: $-0.24 THC: $0.06
BRE: $0.45 DISCA: $0.43 HTZ: $0.13 TAP: $1.19 VSH: $0.29
GAS: $0.44 NYX: $0.59 OZM: $0.12 HK: $0.11 VNO: $1.06
PH: $1.07 OIS: $0.63 OMX: $0.00 PFE: $0.52 WFMI: $0.37
Source: Bloomberg
Important Conferences/Corporate Meetings Today:
Wedbush Morgan Life Sciences Best Ideas MAC – New York, NY
Prior Day SPX (High – 1127.30; Low – 1107.53; Close – 1125.86): Three Day (High – 1124.25; Low – 1083.50):
Source: Thomson ONE

6
FIXED INCOME
Treasuries fell for the first time in 4 days after unexpected strength in manufacturing and construction spending lifted equities. Two-year note yields rose
from a record low, while the yield on 10-year securities climbed 5 basis points to 2.96 percent. Federal Reserve Chairman Ben Bernanke said in a speech
to state legislators that rising wages will likely boost consumer spending over the next few quarters, even though labor market weakness may continue
to weigh on consumer confidence.
Source: Bloomberg Source: Bloomberg
Today’s Important Economic Indicators/Events:

Motor Vehicle Sales: 8.8 M annual rate
Personal Income: 0.1%
Consumer Spending: 0.1%
Core PCE Price Index: 0.1%
Factory Orders: -0.5%
Pending Home Sales Index
7
U.S. EQUITY
OPTIONS
SPX- The index moved in one direction all day - higher - opening up on what would be the low of the day (+0.5%) and ending close to the high (+2.2%; range +0.5 % to
+2.33%). Implied volatility in the options on the index responded by moving lower in tandem, opening on what would be near the high of the day(-1.8%), and ending close to
the low ( VIX - 6.34%; range -7.48% to -1.1%). We highlight a large buyer of the SPX Oct 700 puts 25,000x early in the day and as the day progressed we saw sellers of Aug and
Sep 1100 calls (6,000x and 15,000x respectively).
ETF – With the market surging higher, we noted continued premium buying across the ETF space. Homebuilder ETF, XHB saw ~7 times its usual volume just ahead of reported
home sales. We saw two large prints in the Jan 17.5 Calls bought 9,500 and 11,400 times respectively. Also one investor sold the Aug 15 Calls to close and bought the Aug 16 calls
to open 8,372 times. In other sector flow, XLK (Tech) had one investor purchasing 10,000 Sep 22 Puts vs. selling 15,000 Aug 22 Puts, while in XRT (Retail) paper bought the Sep 38
/ 32 put spread roughly 5,750 times. One investor positioned for upside in China Fund, FXI, through the purchase of 13,250 Jan 45 Calls. Also, in XLB (Materials) 20,000 Sep 30 puts
were sold likely closing out a position opened in July. Lastly IWM saw bearish flow as one investor bought the Aug 55 / 59 / 63 Put butterfly 10,000 X 20,000 X 10,000 times,
while paper sold the Sep 70 / 65 call spread 10,000 times.
CURRENT IMPLIED VOLATILITY / CURRENT HISTORICAL VOLATILITY

Rank 7/27/2010 7/28/2010 7/29/2010 7/30/2010 8/2/2010 30-Day Implied Vol
1 MIL MIL MIL MIL MIL 6.86
2 Q FIS FIS FIS FIS 31.88 BIGGEST MOVERS
3 DF PTV PTV DF DF 53.99 Top 10 30-Day Implied Vol Bottom 10 30-Day Implied Vol
4 FIS DF Q Q PTV 49.45
5 PTV MCK DF PTV ARG 15.27 ARG 21.23% 26.07 AGN -54.50% 14.66
6 NOVL MRK MCK ADM NOVL 34.06 NOVL 21.22% 28.89 PNW -49.56% 39.57
MCK FLIR FSLR FLIR Q 20.72
7
PTV 12.77% 51.17 Q -37.97% 23.87
8 DPS AGN FLIR SLE CFN 38.26
9 FLIR MJN ADM AGN CLX 18.42 V 10.81% 38.68 XOM -28.27% 36.42
10 MRK HUM HUM SAI MJN 33.70 AMGN 8.90% 33.89 MDP -27.83% 33.48
11 MJN Q MFE L SAI 22.73
12 SLE LIFE MRK CLX SLE 22.73
BSX 6.53% 29.21 ADM -26.06% 32.33
13 HSP NOVL AGN MCK AIG 57.85 NEM 6.49% 43.35 TE -26.03% 18.34
14 KG FSLR SLE MJN SWN 37.35 FMC 5.41% 27.33 FLIR -24.48% 31.29
15 FSLR SLE WFR MRK MCK 25.18
16 HUM DPS CLX ARG FRX 25.38 ROST 5.32% 33.92 MKC -24.17% 20.62
17 PCS SYMC EL HUM PBI 26.11 MA 5.32% 30.93 TDC -24.03% 34.11
18 CFN KG MJN CFN EL 31.24
19 LIFE EL CFN CAH PCS 47.36
20 EL FRX ARG AMAT FLIR 24.88
21 L L PCS NOVL AMAT 34.86 We ranked the S&P 500 companies from the highest to lowest 30 day implied to
22 AGN CFN AMGN SWN ROST 31.64 historical volatility ratio. Above we identify the 10 most positive and negative
23 FRX PCS FRX FRX ADM 28.07 movers.
24 SYMC VAR SWN PFE CAH 29.72
25 ADM ADM GME PCS SJM 25.38 The table to the left represents the 25 highest 30 day implied to historical
LMT HSP LIFE GME PFE volatility ratios within the S&P 500 companies. The green represents names
AVP NOVL AMGN HUM new to the list while the red represents names that have fallen out.
TAP DPS EL MRK
PFE SYMC MFE L
DVA KG WFR
AMGN L FSLR
VAR
8
Exchange-Traded Funds/Indexes
Prior Day Peformance of Largest ETFs by Assets S&P 500 Sector ETFs
Name (Net Assets*) Ticker Category Daily Return Sector Ticker 1-Day Perf YTD Perf Sector Ticker 1-Day Perf YTD Perf
SPDRs SPY Large Blend 2.26% Energy XLE 3.53% -2.23% Telecomm IYZ 1.97% 3.60%
SPDR Gold Shares GLD N/A 0.04% Health XLV 1.89% -6.34% Technology XLK 2.10% -2.40%
iShares MSCI Emerging Markets Index EEM Diversified Emerging Mkts 2.60% Industrials XLI 1.98% 11.16% Consumer Discretionary XLY 2.13% 7.76%
iShares MSCI EAFE Index EFA Foreign Large Blend 3.39% Utilities XLU 2.07% -0.16% Financials XLF 2.52% 4.72%
iShares S&P 500 Index IVV Large Blend 2.20% Consumer Staples XLP 1.15% 3.10% Materials XLB 2.69% -0.36%
Prior Day Top Volume ETFs Currency ETFs
Name Ticker Category Shares Traded Currency Ticker 1-Day Perf YTD Perf Currency Ticker 1-Day Perf YTD Perf
SPDRs SPY Large Blend 151,734,821 Australian Dollar FXA 0.84% 1.35% Mexican Peso FXM 0.63% 3.52%
Financial Select SPDR XLF Specialty - Financial 86,341,722 British Pound Sterling FXB 1.28% -1.85% Swedish Krona FXS 1.44% 0.61%
PowerShares QQQ QQQQ Large Growth 62,228,526 Canadian Dollar FXC 0.44% 2.44% Swiss Franc FXF 0.16% -0.61%
iShares MSCI Emerging Markets Index EEM Diversified Emerging Mkts 59,086,557 Euro FXE 1.06% -8.15% USD Index Bearish UDN 0.80% -4.50%
iShares Russell 2000 Index IWM Small Blend 46,594,278 Japanese Yen FXY -0.06% 7.43% USD Index Bullish UUP -0.93% 1.91%
Prior Day Top Performers VIX ETNs Fixed Income ETFs
Name Ticker Category Daily Return Name Ticker 1-Day Perf YTD Perf Bonds Ticker 1-Day Perf YTD Perf
RP Growth ETF RPX N/A 12.87% iPath S&P 500 VIX VXX -5.94% -37.66% Aggregate AGG -0.14% 4.05%
Direxion Daily Energy Bull 3X Shares ERX N/A 10.30% Short-Term Futures ETN Investment Grade LQD -0.21% 5.26%
Direxion Daily Real Estate Bull 3X Shares DRN Specialty - Real Estate 10.01% High Yield HYG 0.52% 0.73%
Direxion Daily Dev Mkts Bull 3X Shares DZK Foreign Large Blend 9.59% iPath S&P 500 VIX VXZ -3.39% 7.56% 1-3 Year Treasuries SHY -0.02% 1.40%
Direxion Daily BRIC Bull 2 X Shares BRIL N/A 7.89% Mid-Term Futures ETN 7-10 Year Treasuries IEF -0.31% 8.06%
20+ Year Treasuries TLT -1.40% 9.86%
Others
ETF Ticker 1-Day Perf YTD Perf ETF Ticker 1-Day Perf YTD Perf
Gold GLD 0.04% 7.67% Crude Oil USO 3.23% -7.13%
Silver SLV 2.16% 8.59% EAFE Index EFA 3.39% -2.91%
Natural Gas UNG -4.00% -21.33% Emerging Markets EEM 2.60% 2.35%
SPDRs SPY 2.26% 1.18%
Major Index Changes:

None
ETFs in the Headlines and Blogs:

ETF Inflows: The Have and Have-Nots - http://www.futuresmag.com/News/2010/8/Pages/ETF-inflows-The-have-and-havenots.aspx
EU calls for more reporting on ETFs - http://www.ft.com/cms/s/0/a503c63a-9c01-11df-a7a4-00144feab49a.html?ftcamp=rss
July Asset Class Performance - http://www.bespokeinvest.com/thinkbig/2010/7/30/july-asset-class-performance.html
Corporates Soar - http://www.bespokeinvest.com/thinkbig/2010/7/30/corporates-soar.html
9
Top Online Social Networking Stories
Latest Popular Digg.com Business Stories:

Visualizing the Fortune 500 - http://www.focus.com/images/view/3855/
A Concise Guide to the 8 Best States for Incorporating - http://grasshoppergroup.com/a-concise-guide-to-the-7-best-states-for-incorporating/
Private Facebook Data Becomes Big Business -
http://www.pcworld.com/businesscenter/article/202285/private_facebook_data_becomes_big_business.html?tk=hp_new
Recession worse, deeper than previously thought - http://www.oregonlive.com/business/index.ssf/2010/07/recession_worse_than_previousl.html
Trends in Business Credit Cards for 2010 - http://ideposit.net/ui/index.php/news/106-trends-in-business-credit-cards-for-2010
Calculated Risk
Private Construction Spending declines in June - http://www.calculatedriskblog.com/2010/08/private-construction-spending-declines.html
Bernanke: Challenges for the Economy and State Governments - http://www.calculatedriskblog.com/2010/08/bernanke-challenges-for-economy-and.html
ISM Manufacturing Index declines in July - http://www.calculatedriskblog.com/2010/08/ism-manufacturing-index-declines-in.html
Restaurant Index shows contraction in June - http://www.calculatedriskblog.com/2010/07/restaurant-index-shows-contraction-in.html
Negative Equity Breakdown - http://www.calculatedriskblog.com/2010/07/negative-equity-breakdown.html
The Big Picture

Seasonality: August Market Performance - http://www.ritholtz.com/blog/2010/08/seasonality-august-market-performance/
Alan Greenspan: Two Economies - http://www.ritholtz.com/blog/2010/08/alan-greenspan-two-economies/
Stockman: How the GOP Destroyed the U.S. Economy - http://www.ritholtz.com/blog/2010/08/gop-destroyed-the-u-s-economy/
25% of Americans Have Bad Credit Scores - http://www.ritholtz.com/blog/2010/07/25-of-americans-have-bad-credit-scores/
The Becker-Posner Blog

Unionism and Economic Recovery (Posner) - http://www.becker-posner-blog.com/2010/08/unionism-and-economic-recoveryposner.html
Unions and the Obama Administration (Becker) - http://www.becker-posner-blog.com/2010/08/unions-and-the-obama-administrationbecker.html
Bespoke Investment Group

Dow Breakout - http://www.bespokeinvest.com/thinkbig/2010/8/2/dow-breakout.html
Sector Performance on Earnings - http://www.bespokeinvest.com/thinkbig/2010/7/30/sector-performance-on-earnings.html
Intraday Earnings Report Trading Patterns - http://www.bespokeinvest.com/thinkbig/2010/7/30/intraday-earnings-report-trading-patterns.html
The Baseline Scenario

The Tilted Playing Field - http://baselinescenario.com/2010/08/02/the-tilted-playing-field/
10
GENERAL DISCLOSURES
This presentation discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions. It is
provided for general informational purposes only and should not be relied on for any other purpose. It is not, and is not intended to be, research, a
recommendation or investment advice, nor an offer to sell or the solicitation of offers to buy any BNY ConvergEx Execution Solutions LLC (“ConvergEx”)
product or service in any jurisdiction. It does not take into account the particular investment objectives, restrictions, tax and financial situations or other
needs of any specific client or potential client. Please consult with your financial and other advisors before buying or selling any securities or other
assets. This presentation is for qualified investors and NOT for retail investors.
Please be advised that options carry a high level of risk and are not suitable for all investors. To receive a copy of the Options Disclosure Document
please contact the ConvergEx Compliance Department at (800) 367-8998.
The opinions and information herein are current only as of the date appearing on the cover. ConvergEx has no obligation to provide any updates or
changes to such opinions or information. The economic and market assumptions and forecasts are subject to high levels of uncertainty that may affect
actual performance. Such assumptions and forecasts may prove untrue or inaccurate and should be viewed as merely representative of a broad range
of possibilities. They are subject to significant revision and may change materially as market, economic, political and other conditions change.
Past performance is not indicative of future results, which may vary significantly. The value of investments and the income derived from investments
can go down as well as up. Future returns are not guaranteed, and a loss of principal may occur. The information and statements provided herein do
not provide any assurance or guarantee as to returns that may be realized from investments in any securities or other assets.
The opinions expressed in this presentation are those of various authors, and do not necessarily represent the opinions of ConvergEx or its affiliates.
This material has been prepared by ConvergEx and is not a product, nor does it express the views, of other departments or divisions of BNY ConvergEx
Group, LLC and its affiliates.
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Lower the Asset Price Correlations, HAL

Historical 30-Days Correlation Against S&P 500

Energy XLE 94.56% 95.17% 93.57% 81.60% 0.61 11.97 8.76

Gold GLD 20.11% -16.47% -26.48% 8.57% 36.58 35.05 17.87

Australian Dollar Euro Yen High Yield Investment Grade

Sector ETFs: High, Low & Avgerage Monthly Historical 30-Day

High Average Low S&P 500

VIX vs. Average 30-Day Historical Correlation of Sector ETFs to

Avg Correlation VIX

Important Earnings Today (with Estimates) From…

Source: Thomson ONE

Source: Bloomberg Source: Bloomberg

Today’s Important Economic Indicators/Events:

CURRENT IMPLIED VOLATILITY / CURRENT HISTORICAL VOLATILITY

Major Index Changes:

ETFs in the Headlines and Blogs:

Top Online Social Networking Stories

Latest Popular Digg.com Business Stories:

The Big Picture

The Becker-Posner Blog

Bespoke Investment Group

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