While fears bring out the bears, the light at the end of the tunnel bring out the bulls.
Financial markets will continue to be volatile until the global concerns ease. Do not hope that this will take a week or a month to ease!
The CBOE VIX, the fear index or the fear gauge, represents one measure of the market's expectation of stock market volatility over the next 30 day period. It has been above 30 since August 2011.
At the close of the US markets this morning, Greece is rumored coming to a favorable discussion with the troika. The school of thought from one side of global investors may bring out the bulls whereas another school of thought will bring out the bears.
Similarly, President Obama has suggested several proposals which are favorable to equity markets but the thought of getting it approve may seem difficult.
The expectation of the much focus FOMC, where Bernanke will unleash his tool(s) may bring a much awaited rally for financial markets but if he disappoints the market expectation, the bears will satisfy their hunger.
The reality is
· Will a Greece default be a better solution for Europe?
· Can Democrats and Republican agree for the future of America?
· How long would it take for BRICs and Asia to overcome slow growth and inflation?
· Will Asia’s largest economy, China and India manage inflationary concerns?
If trading is based on fears and speculation, the market’s volatility will slap you right and left. Markets can stay illogical much longer than you stay solvent! I hope you would not come to realized this saying.
Realize the reality! And wait for the ‘one’ day, after a prolonged heavy downpour, the rainbow has to shine in the not too distant future.
no trading for me - too much stress.
ReplyDeleteI just focus on the STI index and buy when vix
reaches 50.
Too much stress. I know.
ReplyDeleteThat's why my investment savvy clients outsource the responsibility to me.
Buy when Vix is 50. Good strategy! And long term I hope!