The only thing that retail traders love more than earnings season is to endlessly debate the direction of how each issue may resolve. Now if you intent to BUY stock at a discount then waiting for a negative announcement and purchasing shares before the rebound can – on average – work out famously during bull markets. However when it comes to profiting from earnings via speculation the name of the game is not to pick a direction, rather it’s to profit from a large stock price move no matter the direction.
In part 2 of this series I am going to dumb down a key aspect of bear markets that has largely remained unknown to the vast majority of retail traders. It is important to embrace the fact that while the gray unwashed masses focus solely on the daily gyrations of the VIX professional traders instead religiously follow an exotic construct called the Implied Volatility Term Structure (IVTS).
For the next three days I will still be pretty limited in my ability to properly follow the market all the way out here in the Spanish boonies. Internet access is acceptable at about 10Mb/sec but my MBP’s 15” Retina display – albeit crisp and more than appropriate for regular tasks – hampers my abilities to properly run through my extended list of charts and market scanners. Although I am really not looking forward to returning to Valencia during a nationwide quarantine I am eager to jump back into the action in full force. For there are real fortunes to be made in the days, weeks, and months ahead. And this is the moment when you should start paying very [...]
Here I am – stuck in our vacation rental thanks to a nationwide quarantine taking effect this morning – and honestly I could not be happier. Although I have never been a perma-bear the past decade of eternal effervescence had become the bane of my existence. Living in Valencia I increasingly noticed it everywhere around me as unbridled mass tourism is a prime litmus test for an economic bubble that’s just waiting to be pricked. Beyond mere ‘moral hazard’ the grand financial experiment of the 21st century wrought cultural and social implications that ended up destroying families and inter-personal relationships on a mass scale, and in the process pitted [...]