I’m seeing some serious stock market instability starting near the end of the trading day today. The volatility curves are making me nervous. Sometimes it passes without much happening, but I think there’s an elevated risk of a market crash in the next day or three. I can’t say how hard. If this instability persists tomorrow morning, I’ll be taking some precautions, probably going long volatility. If I had been paying more attention, I might have done this at the end of the trading day today. [As always, I am not your financial advisor, and without knowing your financial situation this cannot be financial advice. Please don’t bet the farm. You are responsible for your own money.]
Charting is mostly superstition. This isn’t based a gut feel, but on some statistical analysis of past market behavior that has been reliable enough in the past for me to take seriously. I’ll try to remember to update this thread in the morning.
The instability appears to have passed. I didn’t go long vol, although I had rebalanced early to reduce some dangerous exposure and reduced my usual small short vol position. I’ve now restored my usual short vol position. It could be months before we see a blip like this again.
I bought VIX a while ago when it was at 22 expecting this and while it took longer to go up than I expected but it is now rising and at >30 (peak during early Covid was > 60).
I have the same concern. I’ve been worried about a bubble for a while given all the extra money in stocks pushing up prices well past fundamentals. I expect a correction, but it’s hard to know when the market will coordinate to do it because of lack of other places to put stuff. Today felt nuts in a way I expect a reaction. Consequently, I’ve put my money where my mouth is and rebalanced my portfolio to be more conservative for a while.
I’m seeing some serious stock market instability starting near the end of the trading day today. The volatility curves are making me nervous. Sometimes it passes without much happening, but I think there’s an elevated risk of a market crash in the next day or three. I can’t say how hard. If this instability persists tomorrow morning, I’ll be taking some precautions, probably going long volatility. If I had been paying more attention, I might have done this at the end of the trading day today. [As always, I am not your financial advisor, and without knowing your financial situation this cannot be financial advice. Please don’t bet the farm. You are responsible for your own money.]
Charting is mostly superstition. This isn’t based a gut feel, but on some statistical analysis of past market behavior that has been reliable enough in the past for me to take seriously. I’ll try to remember to update this thread in the morning.
At market open, the instability I was seeing appears to have passed. That did not last long. I’ll keep checking it.
It’s a day later, and I’m seeing it again, but barely. I want to see if it persists a while before acting so I don’t get whipsawed.
The instability appears to have passed. I didn’t go long vol, although I had rebalanced early to reduce some dangerous exposure and reduced my usual small short vol position. I’ve now restored my usual short vol position. It could be months before we see a blip like this again.
I bought VIX a while ago when it was at 22 expecting this and while it took longer to go up than I expected but it is now rising and at >30 (peak during early Covid was > 60).
I have the same concern. I’ve been worried about a bubble for a while given all the extra money in stocks pushing up prices well past fundamentals. I expect a correction, but it’s hard to know when the market will coordinate to do it because of lack of other places to put stuff. Today felt nuts in a way I expect a reaction. Consequently, I’ve put my money where my mouth is and rebalanced my portfolio to be more conservative for a while.