Category: Equities

From Silver Linings to Gray Skies

“I think it was a long step forward in my trading education when I realized at last that when old Mr. Partridge kept on telling the other customers, “Well, you know this is a bull market!” he really meant to tell them that the big money was not in the individual fluctuations but in the main movements – that […]

As Good as It Gets?

If you had to describe the perfect market environment, what would it look like? The following attributes might come to mind: 1) High returns with low volatility and 2) low drawdowns, with 3) global participation, 4) both stocks and bonds rising, 5) the economy expanding, 6) earnings growing, and 7) an easy Central Bank. Sound […]

Statement 1: the average year has between 3 and 4 corrections greater than 5%. Statement 2: every year has between 3 and 4 corrections greater than 5%. Statement 1 is a true statistic regarding the S&P 500 going back to 1928. It can serve as a helpful reminder that there is no reward without risk […]

May you live in uninteresting times. Market volatility has become a thing of the past. To wit, the S&P 500 (over the past 15 trading days) is trading in its narrowest range in history. The VIX, the so-called “Fear Index,” is lower than 99% of historical readings. What are investors afraid of these days? You […]

Thinking about shorting volatility? You’re not alone. Short interest in the long volatility ETN (VXX) has exploded higher in recent months. Source: RBC, Zerohedge Why does everyone want to short vol? 1) Shorting volatility (ex: shorting the long volatility ETN VXX) has been enormously profitable since 2009… 2) This week the Volatility Index (VIX) hit its […]