Monday, February 5, 2018

DOOOOOM


End-of-day charts, then I'm off to do schoolwork:


$VIX is +4SD up. It's dumb to think it can go higher: an 80 intraday is the most I've seen in the past few years. So there may be another day of carnage, but eventually this has to exhaust itself.



SPY is -3SD, and this is half a week's volume in just one day. All those bozos who flooded into US equity ETFs in the past month now have to flood back out, so I dunno if this is actually done yet.


And the $VIX term structure is fucked all to shit now. There is no not-backwardated month. If this was like the past ten years, you could make a lot of money shorting $VIX futures from a starting point of 23 on the March. Wait til the front two months move back to even, wait for a last dry-retch, then short $VIX and profit.

However.

The S&P is still trading at a high multiple and a low yield, and starting today that means something. No, not because of bonds.

Money market apparently makes you 1.5% now. That's an asset class that's been dead for ten years, and it's an asset class that should easily be the size of bonds or more.

I'm wondering if we're starting to see the market realize this.

So I want to sit and wait, cos I'm not sure I want to buy until everyone out there knows whether or not this is what's going on. Cos a major rotation into money market would take a hell of a long time to digest. Hell, just the port allocation strategy changes would be a bitch.


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