Tuesday, August 4, 2009

The Seemingly Endless Volatility Implosion

I gotta tell ya if this market gets any more volatile I may just have a heart attack...

Today was like watching paint dry.

Where are the good old days when the market used to actually move up AND down. Funny thing is there are probably investors that absolutely love this market strength... Unfortunately, I find it rather boring and difficult to game. Dip buyers are still waiting and those late to the party charlies who jumped in after the market was already up 10 + days now seem like geniuses.

With today's shnoozer, 30 day HV on the S&P 500 is now sub 20 (19%). It's more sensitive counterpart, 10 day HV, has imploded as well to a measly 13%. I keep an eye on 10 day HV to garner a better reflection of what's going on right here right now (click to enlarge).

[Source: EduTrader]

It will be interesting to see when we finally get an uptick in volatility. As far as when that comes, I have no idea.

One thing is for sure, anyone trying to bottom pick volatility has just been reminded of the futility of bottom fishing.


3percenter said...

Looks like those late-to-the-game charlies may not end up looking like geniuses after all.I need this pullback to bring my strangles back to neutral.

Tyler Craig said...

Good Point- It inevitably depends on exactly how late these Charlies were and whether or not they're still in.

I've been blown out of the bearish side of most of my trades, but still have some left so I'll second you're beckoning of a market pullback.


Nice take on things