WSJ report on volatility

For any of you who rely on a certain amount of volatility in US markets - and who have been sitting on your hands lately - today's WSJ reports the following:

- We are in the longest period since 1954 without a 2% correction in the S&P, and the second longest since records began in 1896.

- Also in the longest period without a 10% correction, the last occuring in spring 2003.

 

I wonder what Makloda or eqtrdr would say about that?

 

I just can't help but say it....


It's a new market!

 

Trend Trading Hedge Funds must be racking huge returns in this type of market.

 

I was in Vegas the other day and the roulette wheel came up black 15 consecutive times

 

Infact this, and the huge growth in fund $'s/liquidity, could be at the very heart of the market's orderly rise. These funds tend to pyramid their positions so the better they do the more they add to their position. This is part of the explanation for why markets go parabolic, and also why the drop at the end of the run is so steep.

 

its because everyone is selling volatility

 

hundreds of millions of dollars worth of options per month per issue are worth something to make expire worthless.

With billions to play with it would make sense to sell those options, and keep stocks manipulated with a steady news stream, cleverly placed block trades, and cleverly placed futures trades over time.

Thats the only assumption you can make how vol selling would correlate to a lack thereof.

Can't win buying puts or calls.

 

http://finance.yahoo.com/q/bc?s=^VIX&t=my&l=off&z=l&q=l&c=^GSPC

one of the most important comparisons around.

 

that makes perfect sense to me.

that's why the markets define classical reasoning and sound fundamental analysis of what many traders think they "should" be doing, but instead they just go along their merry way.

biggest argument i know of for always trading what you see

Good trading,

JJ