Markets

On an ordinary day most of a stock's move is the market and its sector; the company's own news is what is left over. Judge a rise or a fall without knowing what the backdrop did and you will blame the company for a market day, or credit it for one. This page is that backdrop in one place, so the check takes a minute: the market, the fear in it, the price of money, the sector and industry the stock lives in, the rest of the world and the economy underneath.

Three dials to read together

S&P 500 is the direction of the whole market. VIX is the price of insurance on it, the fear priced in for the next 30 days; it usually moves opposite to the index, and for an option seller it is the price of what you sell. The 10-year yield is the price of money, the risk-free rate every stock is valued against. Each is a number on its own; together they say what kind of day it is:

• Index up, VIX down, yields steady: a calm, risk-on grind. Insurance is cheap, so option premiums are thin; stock buyers pay up.
• Index down, VIX jumping, yields falling: classic risk-off. Money is running from stocks to bonds and the fall is about the market, not your company. Premiums are fat; these are the days wheel traders sell puts on companies they already wanted.
• Index down, VIX up, yields rising: a rates-driven sell-off (inflation, the Fed). Bonds give no shelter, long-duration growth and technology fall hardest, and it tends to last longer than a fear spike.
• Index up, VIX up: the market is rising nervously, often into an event such as a Fed meeting, a CPI print or big earnings. Caution rather than chasing.
• Index flat, VIX at the bottom of its range: complacency. Protection is cheap to buy and poor to sell; a time to add hedges, not premium.

A stock against its backdrop

A walk-through: you are looking at Apple

1. Its sector, Technology. In the Sectors tiles: today, the week, the month, and the P/E against its own one-year average. Is the sector carrying the stock or fighting it?
2. Its industry, Consumer Electronics. Pick Technology and the Industries table lists it: the same moves for the peer group, plus the median margin of safety and the average Wheel Score of the companies in it. A stock that is cheap while its peers are not deserves a closer look at why.
3. The market: S&P 500 and Nasdaq 100. Apple is one of the largest weights in both, so on most days the three move together; a day they part is the day to read the news.
4. Fear: the VIX bar. Low in its range means thin premiums and little room for a surprise; the upper half means rich premiums and a market already braced. That bar decides whether selling a put is worth the cash you tie up.
5. Rates: the 10-year. A P/E of 30 is being paid against that yield; when it climbs quickly the expensive growth names are marked down first. The yield curve on the US Economy tab says what the bond market expects next.
6. The world. Apple earns more than half its revenue outside the US and builds in Asia: the Hang Seng, the Nikkei and the dollar touch its earnings before they reach a US screen.
7. The economy. Consumer sentiment and unemployment are iPhone demand six months out. Then open the stock's fact sheet or Quote page for the company itself.

What to look for, by view

Bullish: you want to own it, or sell puts on it

The best entry is a market or sector dip with the company's story intact: stock down with its sector and the index, not down alone. VIX in the upper half of its range (you are paid for the fear), rates steady or easing, sector P/E below its one-year average, and a comfortable margin of safety on the stock. Be wary of a VIX still spiking at the top of its range: that is panic in progress, and prices will usually be lower, and premiums richer, a few days on.

Bearish: you want to hedge, sell calls or stand aside

The warning set is a market at new highs with the VIX near its lows (protection cheap, complacency high), yields rising fast, a yield curve flattening or inverting, a sector P/E well above its average and a stock that lags while its sector rises. Covered calls pay better when the VIX is elevated; puts bought as insurance are cheapest when it is not.

Neutral: you want to collect premium, or simply wait

Range-bound is the friend here: a VIX mid-range and drifting lower, an S&P 500 within a few percent of a month ago, small sector moves and no large economic print due (the Calendars page lists them). A sudden widening of the dials' one-week moves is the sign the range is breaking.

Every dial and card has its own explaining what the number is, what moves it and how it helps. All of it is context for a decision, not advice; the Learning page has the full wheel walkthrough.