VIX at the weekly.
The yellow circle was the end of that wedge. Looks like I still got it. Thought, this volatility shouldn't be a surprise at all. February-March, June, and September are seasonally the most volatile months of the year. Twitter and other forums are chanting the world is ending. This is just seasonal volatility.
Think about it from a financial operations perspective. Every quarter, portfolio managers have to worry about rebalancing their portfolios for the next quarter and quarter end reporting. What's the first step to rebalancing your portfolio? You have to sell some shares first. Bears have until the end of June to make the most out of their bearish positions. This volatility will very likely be short lived. The subsequent volatility after June will likely be more sector rotation. If history rhymes, then there should be a move back into tech since the inflation hedging is largely done.
Why am I not bearish in general? It can be answered in one question. What other asset can you invest in besides stocks and crypto? TINA (There Is No Alternative). Bonds are less than 2% per year. Inflation rates average about 2.7% per year. Gold and silver have very limited upside. When bond yields rise due to inflation speculation or economic recovery, that causes gold and silver to go down. If I keep it in cash, inflation rates will eat away the purchasing power. Don't get me started with how ridiculous real estate has become. So what other investment is out there? That is literally the question that corners permabears as they don't want to admit that it goes against their case.
Market breadth remains strong. We've already seen the bottom from the lockdown. Federal Reserve literally said over and over that they won't raise rates until 2023. Everything else on media is speculation (not real).
For the VIX, I'm not seeing this go to 40 or above especially since this is seasonal volatility. It's more likely to end around the upper 20s. Maybe mid-30s. I hope it's mid-30s so I can short the spike. I will not use UVXY as it's a garbage ETF. I'd rather use VXX puts to short so I can avoid a margin call.
If history is rhyming, these VIX spikes won't be as big until 2023 or if there is ACTUAL quantitative tightening.
This ain't 2020 anymore. The crash already came. We are in QE environment. That's the reality.
The yellow circle was the end of that wedge. Looks like I still got it. Thought, this volatility shouldn't be a surprise at all. February-March, June, and September are seasonally the most volatile months of the year. Twitter and other forums are chanting the world is ending. This is just seasonal volatility.
Think about it from a financial operations perspective. Every quarter, portfolio managers have to worry about rebalancing their portfolios for the next quarter and quarter end reporting. What's the first step to rebalancing your portfolio? You have to sell some shares first. Bears have until the end of June to make the most out of their bearish positions. This volatility will very likely be short lived. The subsequent volatility after June will likely be more sector rotation. If history rhymes, then there should be a move back into tech since the inflation hedging is largely done.
Why am I not bearish in general? It can be answered in one question. What other asset can you invest in besides stocks and crypto? TINA (There Is No Alternative). Bonds are less than 2% per year. Inflation rates average about 2.7% per year. Gold and silver have very limited upside. When bond yields rise due to inflation speculation or economic recovery, that causes gold and silver to go down. If I keep it in cash, inflation rates will eat away the purchasing power. Don't get me started with how ridiculous real estate has become. So what other investment is out there? That is literally the question that corners permabears as they don't want to admit that it goes against their case.
Market breadth remains strong. We've already seen the bottom from the lockdown. Federal Reserve literally said over and over that they won't raise rates until 2023. Everything else on media is speculation (not real).
For the VIX, I'm not seeing this go to 40 or above especially since this is seasonal volatility. It's more likely to end around the upper 20s. Maybe mid-30s. I hope it's mid-30s so I can short the spike. I will not use UVXY as it's a garbage ETF. I'd rather use VXX puts to short so I can avoid a margin call.
If history is rhyming, these VIX spikes won't be as big until 2023 or if there is ACTUAL quantitative tightening.
This ain't 2020 anymore. The crash already came. We are in QE environment. That's the reality.