Equity markets in particular, since the end of January, have been going above, below, and beyond in order to test our collective mettle. I have to concede that I have rarely worked this hard to squeeze out an edge and to retain a reasonable technical perspective. Meanwhile the prospect of final resolution (up or down) continues to be only a few trading days away. Only to then again evade us of course.
I just took a glance at the E-Mini and it looks like we may be served a potential roll over scenario here. Yesterday I promised you realized volatility (RV) and we’re certainly getting a generous helping of that. I also gave both the bullish and bearish scenario pretty even odds based on [elaborate reasoning here]. Now this morning it’s becoming clear that yesterday’s meek advance will be unable to hold its meager gains.
The eternal ebb and flow of realized volatility (RV) is a key concept in order to understand what has been happening in equities over the past week or so. For over six months now we’ve seen a marked increase in RV which in the process it has claimed numerous victims in both the bullish and bearish camps.
King Dollar got up early this morning and decided to run a pimped out monster truck through the entire forex market whilst laughing maniacally and crushing various over bloated Euro currencies in the process. I’ve been waiting for this moment a long time, so let’s take a moment to review the beautiful carnage in all its gory details. Hashtag: #comeuppance