According To This, 2016 Is Set To Be The Most Volatile Year On Record

Tyler Durden's picture

It is different this time. So far in 2016, there has been 23 days where the S&P 500 has moved +/- 1%. To put that in context, in the last 60 years, no other year has started off with such volatility.

 

2016 has been busy...

 

2016 is now the "most volatile" year on record...

 

And for those wondering about VIX in context - S&P Implied Vol just dropped back to its historical volatility, which is picking up once again.

 

When the market is swinging around at this rate, does the risk-reward really make sense for those buying dividend-stocks to be "paid to wait" seems weak... and furthermore, most hedge funds will be forced to derisk amid this chaos (which perhaps explains the recent crash in equity market neutral funds).

 

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booboo's picture

Healthy markets don't have panic attacks

Ham-bone's picture

There is a "market"...it's just that it is a market of central bankers trading with algos and digits called "money".

Central banking explained...Central Banking for Dummies Guide.

http://econimica.blogspot.com/2016/02/central-banking-for-dummies.html

Joe Cool's picture

So I should buy the VIX...

That can't be rigged...

Right?

Bear's picture

And I'm losing my ass on VXX ... ETF's are an absolute LOSER

Nobody For President's picture

Then stay away from them. I've been making a middle class income on them, and killing on trading TZA/TZA so far this year. (Knock on wood, or my head - both work.)

Specialize, always, always use stops. Be patient.

I've made a decent return on ETFs the last three years.

Keltner Channel Surf's picture

That may be true overnight, but I can't recall a year with less intraday, post-open day session volatility in the 1st Qtr.  Moreover, with nearly every open being equivalent to a triple digit gap in the Dow, getting good entries, given the managed horizontality from 10 to 3, has been challenging for traders.

scraping_by's picture

@ K Channel Surf.

 

HFTs, however, are getting their sub-penny slice of each and every move. Think of it as a tax on trading. For the exchanges, not the gubmint.

 

 

Keltner Channel Surf's picture

Don't disagree, but if you asked the general public "has this been a good year for daytraders", most would say "hell yes", but for cash traders staying out overnight it's been perhaps the worst 1Qtr in at least 5 years.  99% of the moves this year have been from 2:00 a.m. to 10 a.m.

Nobody For President's picture

KCF, agreed/ My usual entry is between 0940 and 0955, or I don't go for the day. (Not always, just usually.) If I'm good on the day, I put in a stop a penny or two above entry and hold overnight; if I'm down for the day I usually exit at 1550ish unless the trend the last hour is mostly green. I seldom hold over the weekend, especially if I'm long.

I've only been day trading, after a lifetime of investing, the last 5 years.

And I only trade with my play money, that I can afford to lose. (Now it's house money.)

RMolineaux's picture

How much of this volatility is due to the expanded fashion of short-selling?  Also worth mentioning are HFT, front running, and use of inside information.

Nobody For President's picture

HFTs, front running, and inside info have been around a looooong time.

I suspect much of the volatility is due the general unease of the 'smart money' and otherwise non-MSM crowd trying to think for themselves that are concluding that the so-called bull market is over and the CB(s) are losing their mojo. So it is becoming more of a sell the rips kind of market, which (ahem) limits the upside.

But I may be wrong about that.