The Smart Money Left The Markets in February 2007!
What happens when you calculate the annualized volatility of the VIX Volatility Index and chart it? You see a violent spike in volatility in Feb 2007 which I suspect was when the “smart money” left the markets. Since that time the markets did hit new highs but they haven’t really moved significantly higher than the highs hit in Feb 2007.
Good thing I listened to my S&P500 Timing Model and closed a lot of positions in mid December. I still remain 60% in cash and bonds right now and I suspect a lot of churn to be happening from now till the summer.
Tags: Economy
January 6th, 2008 at 3:51 pm
Where did the smart money go when they left in February? As far as I know, bond yields didn’t go sharply lower until the summer.
January 6th, 2008 at 3:56 pm
SW: That’s a good question, maybe into Gold? Or the Euro? I’ll let you know when I find out.
January 6th, 2008 at 8:33 pm
Let’s digg this post to the stratosphere!
January 6th, 2008 at 9:21 pm
sherry, that sounds like a good idea!
January 13th, 2008 at 5:50 pm
First Tom let me say I appreciate the compliment. Though I think in my case it was by chance. In February 2007 I actually liquidated all of my positions because I did not like the state of the market.
So where did I put my money? My wife and I bought land! Seriously we bought 40 acres with a little private lake. And in five years from now we will either build something on it or sell it.
January 14th, 2008 at 8:06 am
CG: Good move, I pulled most of my $ out in December. Where did you buy the land? Germany?
I’ve been eyeing some property in Southern Germany myself.
January 15th, 2008 at 4:27 pm
I bought land in Canada…
Good for you for pulling your money out. With days like today it feels good…
What was interesting today was that I have indicators telling me which way the market goes for the market in general, and for individual tickers. I use it to find investing opportunities.
Well yesterday (Monday) 2 hours before closing ALL, and I mean ALL pointed down. I looked at that and thought, WTF… Normally my indicators are up and down, and down and up. Rarely do they ALL point in a single direction.
Now I understand…
What I find very interesting about this is that most people thought we turned a corner…
Though I am rubbing my hands. I have already put in buy positions for a bunch of stocks a week ago… When I put my orders in my broker put out a message, “Your order may contain a mistake because it is quite a bit under the last close price.”
January 16th, 2008 at 8:03 pm
Yeah the ugliness will continue in the markets till we burn off the Greenspan liquidity. Oh wait, we’re getting more liquidity from Bernanke! Scratch that forecast!