Here’s what we think of the USD breakout and lower VIX
Today with Doc we start off with the continued move up of the USD. Now at levels above recent resistance (at 13 year highs) there is the possibility of a continued move upwards. We look at how this can impact markets and other sectors. We also discuss volatility that is close to breaking an uptrend line – see the chart below.
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That’s a must-listen for the Trump kool aid drinkers.
Thanks for posting. Haven’t heard a lot from Skarica since his book on the Supercycle.
The dollar should continue through tomorrow, because silver will get knocked down tomorrow. ( COMEX options close day.)
I’m thinking the $VIX had it right, but could not forecast any central bank intervention. Have to agree that $VIX will be quiescent, and that low volatility equities will continue to rise. I’m actually a little depressed after seeing the markets drop limit down, then see new historic highs. With higher treasury bill rates, these are perhaps the very beginnings of hyperinflation, should the Fed be moved to raise rates and then raise rates again in half the time. Very ready to entirely give up on deflation.
A low volatility example:
KMI will double its cash flow once British Columbia gives the okay on the pipeline from inland.
Doc, What actually makes UVXY go up or down? Does a drop in the conventional market tend to raise it or are there other factors?
It’s said that volatility is influenced mainly by fear and greed in the markets. I believe it’s mostly fear after watching the VIX for years. That’s probably why the VIX appears to move higher when the conventional markets are moving down and moves down when the conventional markets are complacent and moving up—not much fear then. Personally, I don’t think greed has much of an influence.
Pardu, I might add that UVXY, VIXY, etc. are ETFS that attempt to emulate the VIX which is considered the “investor fear gauge”. They trade like stocks. UVXY stands for “ultra VIX short term futures ETF”. It’s 2Xs leveraged and therefore quite risky.Ideally, UVXY would exactly track the CBOE’s VIX index—the market’s de facto volatility indicator. However, since there are no investments available that directly track the VIX ProShares chose to track the next best choice: VIX futures. I won’t get much further in the weeks since it’s pretty complicated. Just remember, a leveraged fund like this can be quite risky.
Thanks Richard and Doc. UVXY will probably be tame in the weeks ahead until January when changes begin to occur. As Doc stated as January goes so goes the market. I will hold neutral until then, unless I hear that volatility may increase due to other factors in the market.
A good history lesson from David Skarica:
https://vimeo.com/191873113