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Volatility Is Back
Despite proclamations of stability in oil prices this week, Oil implied-volatility has surged back to new cycle highs this week (near record highs). Credit volatility has been rising for a number of weeks and now equity volatility has been dragged higher (to its highest weekly close since Dec 2012). Thanks to the SNB decision, FX volatility has also exploded this week - the biggest spike since May 2010 to its highest since Dec 2011. Rate volatility remains the least affected for now - though has been on the rise all year and now stands at it highest in 4 months.
Simply put, since QE ended... volatility is back.
Chart: Bloomberg
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Since volatility is back QE4 is about to begin.
Except this time it's the Eurozone national central banks doing it and not the Fed.
"Who's the U boat Commander?"
Lots of chatter about Draghi doing a QE but why would he when his currency is already so weak? Seems counter intuitive but then again logic defies most neo-Keynesian central planners.
Jan 22, 2015 = QEU for the ECB
QE4EVAH** FTFY
Too many days falling asleep in my chair, I've forgotten how much fun volatility is !
Here's Johnny....
Well thats what we wanted, right?
But it's still not that high, and it won't be unless the Fed completely lets go, which I do not believe it has yet.
It's not the Fed that is holding up the system at this point, it is the faith of humanity to trust it. The Fed has created a greater risk to the market than ever has existed. The turning point will be when investment turns away from the dollar and dollar denominated assets and move towards allocated gold.
There's been an invisable bid under everything for almost (7) years.
I agree technical and oscillating studies have been rendered moot, by Central Banksters.
Technical studies will be important this year. Keep understanding those charts.
Has the potential to be the best year for skilled traders (ah, those damn caveats) in half a decade, in a number of asset classes, and across a variety of strategies and holding periods.
Regarding charts :) Old-school techies, who still refuse to acknowledge algos, HFT, or other ghastly ‘innovations’, suggest all the major indices are forming an irregular Head and Shoulders pattern (such that, if it works, they’ll claim prescience, while if it fails, it was because it was ‘irregular’, after all), while my new age calculations suggest the following: it’s actually the markets, in unison, flipping the bird to central bankers.
Charts DO matter KCS.
I read all your thoughts and ideas. I know you'e "well learned". I appreciate your thoughts. Some of the old guys use open and close candles. I like to see P/A price action over 4-8 hours, and doji or shooting star ECT. moves.
I haven't traded the Swissy in 2 years.
Don't take offense, in fact I stare at charts virtually every minute of every day, candlesticks, but without other 'below-the-chart' technical indicators, success from price alone has become harder post-algos.
I was really poking fun at outmoded signals and "pattern formations" that modern scrutiny and testing have shown to be dubious, such as Head n Shoulders, cup w/handle, golden crosses, or even some of the more esoteric patterns in Nison's candlestick book (e.g., "New Morning Whale-Spouting Puffy-Clouded Krakatoa Blow-out, etc.). Can't remember the author, but I read that extensive testing suggests "hammers" (or any pin-bars) and shooting stars have the best validity, while 'engufing' patterns, such as harami, are the least reliable.
Convinced algos have arbitraged away simple moving average crosses, as well as many obvious support/resistance lines. At least for equity indices, it's an amalgam of big houses playing DMA ping-pong, 15-minute VWAP algos, and various mean-reversion quants. It seems the're so big they leave a trail of crumbs, which each of us follows in our own way, trying to fill our basket before the blue whales crush us.
I say again
WHERE IS YOUR LIQUIDITY IN YOUR MARKET?
If you say "oil at twenty five bucks a barrel" you have my attention.
Often think your replies are posted to the wrong person :)
I trade specialized ETFs that average 8-25 million shares a day, rarely is the bid/ask spread more than a few pennies, and always use bracketed OCO orders and return to 100% cash at the end of each day, so liquidity isn't really a major issue. Biggest losing day in the past year is ~$1,000, so you can see I'm careful (or a small player, or both), but thanks for your concern, Vet.
Don't mind him. He has it on good authority the wreckoning is a coming.
You should go to the VA and get those meds checked my friend....
You've been completely off your rocker for a few months now.
EU QE I suspect will be like most everything else European....not nearly as great as you thought it would be.
Back-Door QE......You know this never stops
If I jump off the roof.....I just land in a bunch of leaves
I'm in the Woodlands....Just north of the tall buildings in Houston
Why are there the black helocopters over my morning
Welcome home baby!
Why would I want to be long a "safe haven currency" with a lower rate of return than the base currency?
You mean like the Yen?
Breaking the SNB is just a warm up...
"Volatility is back" - and it's playable if you have the right tools...
http://www.globaldeflationnews.com/how-to-tame-the-volatile-financial-ma...
lol yeah, it keeps wanting to imitate or simulate what a real market would actually do.
fINALLY! THE FINAL CRASH IS COMING. Hold onto your lead and gold reserves, people.