I’m seeing some serious stock market instability this morning. I’m calling it. Market is crashing. I can’t say how hard or for how long. The reasons should be obvious, but I’ll say it: the present war in Ukraine.
I’ll be taking some precautions, including going long volatility, and buying some index puts. I am not your financial advisor, but seriously, take a look at your portfolio RIGHT NOW!
These are short-term plays. Theoretically, puts will rapidly deflate in value once the market bottoms, so if one were to buy some defensively (or aggressively), one should be prepared to sell them quickly after volatility peaks.
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 when I sell off my puts.
ETA: For those who can’t trade options, there are inverse index ETFs, which are also short-term plays. These may not be available to everyone. It may also be prudent to scale back any broad market exposure (i.e. anything correlated with the S&P 500) in proportion to current volatility, until the current volatility spike passes. This follows from Kelly. Whatever you do, don’t jump off at the bottom. This too shall pass.
Risk is still elevated, and surprises are possible, but insurance is no longer worth the cost to me. The market has regained its footing. I’ve removed my precautions, as of today.
Market appears to have bounced as of this morning. Indicators of instability persist, however, they do lag a bit. In my estimation, risk level is still high, so my precautions remain.
I’m seeing some serious stock market instability this morning. I’m calling it. Market is crashing. I can’t say how hard or for how long. The reasons should be obvious, but I’ll say it: the present war in Ukraine.
I’ll be taking some precautions, including going long volatility, and buying some index puts. I am not your financial advisor, but seriously, take a look at your portfolio RIGHT NOW!
These are short-term plays. Theoretically, puts will rapidly deflate in value once the market bottoms, so if one were to buy some defensively (or aggressively), one should be prepared to sell them quickly after volatility peaks.
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 when I sell off my puts.
ETA: For those who can’t trade options, there are inverse index ETFs, which are also short-term plays. These may not be available to everyone. It may also be prudent to scale back any broad market exposure (i.e. anything correlated with the S&P 500) in proportion to current volatility, until the current volatility spike passes. This follows from Kelly. Whatever you do, don’t jump off at the bottom. This too shall pass.
Risk is still elevated, and surprises are possible, but insurance is no longer worth the cost to me. The market has regained its footing. I’ve removed my precautions, as of today.
Market appears to have bounced as of this morning. Indicators of instability persist, however, they do lag a bit. In my estimation, risk level is still high, so my precautions remain.