One thing this volatility is telling you as well as the number lines is that you probably should NOT expect a selloff capitulation but rather a bear market in prices where we trade lower at normalized volatility. This should have enormous implications in how you structure your trades.
Mav do you think we have gone beyond the blow off top scenario? I always presumed and I think you also once posted that most tops are created on good news - which we haven´t really had yet.
Some could argue that the correction we had in August was the correction we had during the Asian flu in 1998 when the nasdaq corrected 20% before trading back to the highs in the blow off top. We did something similar. We did manage to come all the way back to the highs in Dec. This is the 2nd longest bull market in history and I figured it would end in spectacular fashion. Not this kind of grinding range bound top we had. There are a lot of things going on right now with the macro that are creating this back and forth. Number lines are telling you not to be long now so that is what I'm going on. This move in Gold is really interesting.
I might be wrong but I think this is not a bear market yet. Chinese still haven't capitulated yet and could potentially surprise us. This year is election year. Yield curve is not flat or inverted. Stronger jpy/eur might provide fuel for the stock market and summer might give some breathing room for oil companies. Not that many alternatives to put your capital for yield anyway. But of course energy sector, china and all banks related to them has some serious problems and its not clear when it will get really ugly. However I noticed that the happening always happens much later than everyone expects. Once everyone forgets about early warnings. Its just not clear at what stage we are now.
It feels like everyone is expecting a major sell off right now and no one wants to be the first to rush out the door...
I don't think whether this is a bear market or bull market should affect your decisions. I analyze number lines. They don't look good right now. That could change next week. What I don't see happening is a plunge. I do think this market is going to grind lower. Again, because of the number lines, not because of some descriptor bull or bear.
Niederhoffer's little brother crushing it this year. http://www.businessinsider.com/roy-niederhoffer-best-performing-hedge-fund-2016-2