will ALWAYS work in the shorts favor!Remember, out of 265 trading days in 2011, the VIX was up ONLY 95 trading days.And out of the 95 UP days, the VIX went up 10% or more on only 19 out of 265 trading days- just 7% of all trading days last year.And in 2010, out of 265 trading days, the VIX went up only 91 trading days.So, what the math tells you is that the VIX will be DOWN 70% of the time. It will only go up 30% of the time.In sum, longs will always lose in the long run. Smart longs TAKE PROFITS the minute they get them!
Gee, I wonder why the VIX fell so hard so many times in the last year?Could it have anything to do with the Fed pumping over $2 trillion into the markets?Could it have anything to do with the Fed signaling that ZIRP will go on indefinitely?What happens when the Fed is forced to raise rates?What happens when QE3 fails to convince equity holders to keep buying?The markets are high and volatility is low because of the actions of the Fed.Nothing else.Real world volatility will not be held back in 2012.The Fed is out of tricks.
You are right that it won't be held back, but don't go broke waiting for it. Day trade and don't switch to long term long until you see some backwardation. JMHO