It has been the obvious trade since 2009…short the rallies.
Woops. Pow! Margin call!
Being long has been nirvana since March 2009. We have been in a buy the dips and even buy the rips market. The chasers have only been scared a handful of times, but they will always be part of the market because they follow the ‘pundits’ and read ‘mainstream’ media.
On Stocktwits there is a constant chatter about the $VIX (a measure of volatility). It is a smart conversation and not dangerous if you have just listened and not acted on the chart or trend.
I have long avoided getting short stocks other than for short periods of time and when I am in the mood to lose money :) .
I would have wagered a lot of money in 2009 that the social media generation would have brought increased volatility to global markets. If everyone is holding hands and everyone is addicted to the news, should’nt the ‘flinches’ and ‘waves’ happen continually and have even greater spikes?
As it turns out, the people are calm. It’s just the media trying to rattle them 24/7/365. The global connectedness has ‘throttled’ and ‘dampened’ this drone of media that wishes for volatility and viewership.
Turns out the headlines are being ignored. People are turning to trusted ‘people’ in their own small ‘networks’ …their own ‘pelotons’ as I call them.
That does not mean volatility has left the global markets, but it does mean the real fires might be ignored until it’s too late to get out next time.
Just some food for thought and discussion…