Billy,
Most native speakers could only hope (if they cared) to write as well as you do. Sad but true.
As for markets, do you have any thoughts on volatility? This has become a minor obsession for me.
Billy,
Most native speakers could only hope (if they cared) to write as well as you do. Sad but true.
As for markets, do you have any thoughts on volatility? This has become a minor obsession for me.
Nickola,Originally Posted by nickola.pazderic
Thank you for the kind words.
About volatility, I found the link you posted on realized vs. implied volatility most telling.
No matter how you approach it, the higher the volatility (historical or implied), the higher the probability of being in or near a bearish environment. The zenpenny article with its examples of real and fake bottoms illustrates the phenomenon well with several examples. A really bullish environment allows for large fund managers and other players to fully develop and scale orderly into longer term enormous accumulation programs that can be spread over many weeks. Every dip is bought and never revisited before long because there is a strong confidence in the future. Volatile, shaky and violent two-way moves like now simply tells us that confidence is not there for long term and massive deployment of capital.
The volatility for IWM as measured by 20-day exponential ATR is at 3.22% compared to levels averaging less than 2.5% in normal real uptrends. All risk-reward based trading plans of professionals take this into consideration and keep them away from committing to the long side with full deployment of capital.
Implied volatility as measured by the VIX has only seen very brief visits below the 30 level in this uptrend. Normally real sustainable uptrends should only see brief visits ABOVE the 30 level. More and more funds and portfolio managers have strict rules that forbid them to buy when the VIX is persistently above 30.
My subjective reflection on this and other market data is that the next signal from the robot will have much more potential for success if it is a sell signal rather than a buy signal.
Billy
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