Down 600, Up 500, Down 500, Up 500 Can someone explain what is going on?
That’s wonderful.
ManMythLegend Wrote: ------------------------------------------------------- > Down 600, Up 500, Down 500, Up 500 > > Can someone explain what is going on? Must be Obama.
Volatility is up. It basically means that the range of uncertainty has increased, but investors have not reduced their portfolio risk to acommodate it. When they do, the relationship between macro uncertainty and market volatility will readjust to more “normal” levels. Part the the reason things are so volatile is the low treasury yields. This means that changes in the demand for returns are essentially levered. If treasury yields were higher, then moderate changes in fear would have only moderate changes in price action.
Also, a lot of options dealers are short gamma (raise your hands if you bought puts recently). So, the dealers are exacerbating market movements by hedging their delta.
Obviously, there is a huge amount of concerns about Europe and the growth prospect in the US. People are very uncertain how things will go. Irrational emotions took over the market. It’s a great trader’s market, some may say. But most guys who lost their shirts are traders if you look back in history. Before the black Monday in 1987 and in late 2008, markets saw similar 3-5% up and down days for a few months. And then the biggest crash came. For many guys, GAME OVER… For short-term investors, Dick Bove said today: stop investing untill there is more clarity on many things. For long-term investors (5 years out), Warren Buffet always says something like: buy some when they dive. Buy some more if they dive further.
AlphaSeeker Wrote: ------------------------------------------------------- > Obviously, there is a huge amount of concerns > about Europe and the growth prospect in the US. > > People are very uncertain how things will go. > Irrational emotions took over the market. It’s a > great trader’s market, some may say. > > But most guys who lost their shirts are traders if > you look back in history. Before the black Monday > in 1987 and in late 2008, markets saw similar 3-5% > up and down days for a few months. And then the > biggest crash came. For many guys, GAME OVER… > > For short-term investors, Dick Bove said today: > stop investing untill there is more clarity on > many things. > > For long-term investors (5 years out), Warren > Buffet always says something like: buy some when > they dive. Buy some more if they dive further. True, the trick is to figure out how much dry powder to keep around. I’m still trying to figure that one out. I’ve been nibbling a bit and have reduced my cash position from about 66% to 40%
So it’s like down 600 up 400 down 500 up 400 what about tomororw?
ohai Wrote: ------------------------------------------------------- > Also, a lot of options dealers are short gamma (raise your hands if you bought puts recently). So, the dealers are exacerbating market movements by hedging their delta. …double edged sword.
AlphaSeeker Wrote: ------------------------------------------------------- > For short-term investors, Dick Bove said today: > stop investing untill there is more clarity on > many things. How Dick Bove still has a job is beyond me.
Sweep the Leg Wrote: ------------------------------------------------------- > AlphaSeeker Wrote: > -------------------------------------------------- > ----- > > For short-term investors, Dick Bove said today: > > stop investing untill there is more clarity on > > many things. > > How Dick Bove still has a job is beyond me. People take what he said with a grain of salt of course. To be fair, he made some good calls recently at least. “Sell” on GS, WFC in May/June. And in late July he advised investors to sell everything before the debt ceiling thing settles, before the 10% drop.
AlphaSeeker Wrote: ------------------------------------------------------- > So it’s like > > down 600 > up 400 > down 500 > up 400 > > what about tomororw? Hopefully down 1000
AlphaSeeker Wrote: ------------------------------------------------------- > So it’s like > > down 600 > up 400 > down 500 > up 400 > > what about tomororw? The Dow is going to hang around at this level for a few more days, but will most likely see a 50-100 point drop on Friday and then an increase Monday. The VIX looks slightly overstated right now and should begin to lower as we claw back to 12000 again.
Analti_Calte_Equity Wrote: ------------------------------------------------------- > AlphaSeeker Wrote: > -------------------------------------------------- > ----- > > So it’s like > > > > down 600 > > up 400 > > down 500 > > up 400 > > > > what about tomororw? > > > The Dow is going to hang around at this level for > a few more days, but will most likely see a 50-100 > point drop on Friday and then an increase Monday. > The VIX looks slightly overstated right now and > should begin to lower as we claw back to 12000 > again. Why do you think we’re going back to 12k?
It’s the bots man, they don’t care what the actual level is or the intrinsic value of the market, it’s all about nano-second trades…they’re taking over the world.
newsuper Wrote: ------------------------------------------------------- > It’s the bots man, they don’t care what the actual > level is or the intrinsic value of the market, > it’s all about nano-second trades…they’re > taking over the world. Shhh, don’t tell anyone. No bell today your terminal will read: “all your base are belong to us!”