that the general public in getting back into the stock market now. Evidently this was based on 401K elections. Wow, it took that long ?
Typically when the moms and pops and x-gens alike decide it's time to buy... it's closer to the time to be selling. Using this as a barometer, how much more do we have in terms of SNP point percentage ...or in months until the plug gets pulled on the late comers ?
But to possibly refine that as a strategy I'd like to better target my bearishness.
personally, I see a mountain of printed money (Speaking about the OECD) in order to maintain the charade.
for the last number of years, central bank policy has used printing to support nominal(not real) growth.
Now we see printing just to sustain current economic activity and just hold onto current levels in the broader market indices.
but inflation can't be ignored.
So given an inflationary backdrop, I think that that could temper any large downside risk in the broader market and prevent the VIX from jumping like some might expect.
Not sure if any such tools to play small cap market volatility but if a volatility index based on US small caps were available, I think I might prefer it.
JMO but printing hurts the chances of large and sudden downward moves in the market (and chances for increased volatility) and to the extent the USD weakens as a result of more printing, the multinational large caps tend to be somwewhat protected by their foreign sales exposure.
i.e should the USD fall, their foreign competiveness is helped and those sales when converted back to USD's get a boost.
(My short exposures tend to be domestically oriented for that very reason.)
I'm playing some VXX today... not much good happening there so far. I'll be patient, the market should fall back at least 10 points on the SNP. The SNP left a gap today, and the SNP never ever leaves gaps unfilled.
But so far today better money to be had on the long side of the market.... duh.
Apart from another major crisis, the market should end the year higher.
- continued stimulus/easing - continued corporate profit growth - some limited job growth - ongoing EM demand for commodities
This cycle has not yet peaked. IF economnic growth becomes self sustaining, we could actually see several more good years. OTOH, if the economy fails to ignite, and politics causes stimuli to be removed... we could enter recession again... look out below.
The idea was not to look at the economy or the recovery... and not to attempt to anticipate any crisis. Perhaps it is not realistic to time a top just by consumer stock market sentiment.... I dunno. But my guess is that somehow, it's more than less a contrary indicator... no ?
You say apart from another major crisis, the market should end the year higher.
As we are headed directly into a double dip recession continued stimulus and easing is prolonging reality it’s not working. We seem to have a major crises every day lately Israel Syria Saudi all ready to catch fire what are the odds.