Did I mention that I hate winter? I wish I could tell you that I am all back to my normal devious self, but unfortunately I’m still trying to shake what has turned out to be one nasty head cold. My wife’s actually had it for almost a week now as well as apparently every other Spaniard we hear walk by our house judging by the incessant coughing and sneezing. Honestly I think this will be the last winter I’ll be spending over here in Europe. Even down here in Spain the humid weather and short daylight hours eventually catch up with you. I was actually considering to make an emergency run for the South but even in Tenerife it’s only a few degrees warmer with rain [...]
It seems like along with a new POTUS (which one exactly still remains to be seen) we also seem to be getting an entirely new FOMC monetary policy, as Yellen appears to suddenly have discovered new faith in God and higher interest rates. The increase in the federal funds rate to a range between 0.5% and 0.75% was expected but came along with the prospect of brisker monetary tightening. And not surprisingly all hell broke loose… well, at least over in forex and precious metals:
It’s crickets on the setup front, nothing salient on my momo charts either. Which means it’s time to relax, take a step back, and review the big picture across the board. Although point & figure charts seem a bit antiquated in this day and age I have never understood the negative opinion some traders hold against them. After all PnFs simply give us an opportunity to cancel out an inherent but sometimes deceptive aspect of your vanilla candle or line charts. And that is TIME.
If you have been visiting regularly then you probably recall some of my earlier posts on realized volatility . For the rest of you here’s a quick recap as it’s important to understand what realized volatility (RV) is and how it compares to implied volatility (IV). Simply RV measures the amount and amplitude of price change observed in a financial instrument over time. Big moves to the up side and down side will both produce spikes in RV. As such the volatility we measure or predict always produces an unsigned return – it does not care whether the market goes up or down.