Volatility Spike!

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Here’s yesterday’s volatility spike.  This could very well be the bottom, I hope!  My S&P500 market timing model made a 4 STDEV move yesterday and issued the strongest BUY signal yet.

I’m very cautious these days because I’ve been averaging down and losing money.  This is an extremely stupid way of investing in the short term but you gotta think long term here, and have the BOS to do so. :)

  • Frank

    glad you are back

    The market has gone through a “regime change” due to the rule changes such as the 800+ list of stocks which are banned from shorting.

    Also the exit of many hedge funds (many of whom themsleves didn’t blow up but their prime brokers did or else the prime brokers ratcheted down their leverage).

    The market driver now is short term credit. Every business that has significant working capital needs from the corner store up to GE depend on short term financing which is now frozen up. If this doesn’t thaw soon we’ll see a wave of business failures. I’m curious to see how you address these black swans!

  • http://www.macrotactics.com Caprica

    I am glad you have BOS. I could not average down in this market. Until we see a clear break through 1000 or a bounce off it, I am staying out of new long term trades.

  • http://www.neuralmarkettrends.com Tom

    Caprica: One of my simulations show a race to 700. My BOS will be really heavy then. :)