OK this week was kind of rough for the unexpected. I am not even sure if anyone outside of the game noticed the small changes since Tuesday. My positions are down broadly. Lets go over a few trades and things that happened.
What happened?
First I notice an uptick in volatility. The "Shooting Star" at one point in its life time, was a totally BLUE candle. All the way blue to the top. Then it collapsed and left behind what we call a shooting star. It usually means, depending what you read or believe, depending on the color it increases the possibility of an increased volatility over the next few days. If it was red then the bones would tell a different story. I only noticed the volatility increase since Tuesday.
What does that mean?
Created by the Cboe Global Markets (originally known as the Chicago Board Options Exchange (CBOE)), the Cboe Volatility Index, or VIX, is a real-time market index that represents the market's expectation of 30-day forward-looking volatility. Derived from the price inputs of the S&P 500 index options, it provides a measure of market risk and investors' sentiments.
If the VIX Index goes up by 25% the whole worlds investments are 25% more at risk in a 25% more volatile market. And since we are in a stretched BULL Market we can expect a correction. This increased volatility wont make the market shoot up even steeper and we should all buy more stocks, NO, it means the opposite even though in theory it can mean both, up and down.
What are the markets showing?
When the S&P goes down, the market is down. Pure and simple.
Thats why my positions are down where I am long and up where I am short. Beside that the S&P is down for two days, the DJI is down as well and the DAX is flat since 2 weeks! We can see a dark cloud in the copper prices as well.
If we take a look at ARK EFT Investments we also see that Cathie Woods is loosing ground and is letting go on some positions in her portfolio.
Lets look at the S&P500 since Covid!
The markets grew big time in 2020 after the Black Swan event of the China Plague 2020. The S&P gained more than 50%.
2,300 Pts to 3,900 Pts. We see no big Bullish Flags or mega corrections since one year! The market is bullish but a lot of people start talking about a 10% correction. This would mean for the S&P500 a drop of about 400 points to 3,550!
Alright. Lets make some money!
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