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Saturday, January 16, 2010

Week in Review: All Quiet on the Front (PODCAST)

"Gillom Rogers: Yeah, he said that a man has to have guts, and be good with guns.

John Bernard Books: Did he mention that third eye you better have?

Gillom Rogers: Third eye?

John Bernard Books: For that dumbass amateur. There's always some six-fingered bustard that couldn't hit a cow in the tit with a tin cup. " - The Shootist, 1976, John Wayne

Welcome to the Week in Review!

Truth be told, it has been a pretty quiet week. The VIX is measurement of volatility within the market. It's been called by some 'the fear' index, as it rises during times of market uncertainty and crisis. And the VIX? The VIX is down ...

Which means volatility is down, which means fear is down. This is usual after periods of extreme economic distress. Volatility decreases to a more usual range. So I guess what I'm saying here, more than anything else? Is that I'm not someone who will try to whip up some 'avenue of fear and righteous anger' if there is really no problems to talk about. The capital markets always have some problem somewhere. The VIX is saying that the market overall, believes that we're reverting to a more usual 'problem' level. And I don't believe in 'whipping up populist anger' to somehow make myself a more popular blogger to follow. I have no problem saying ... 'yeah, it's been a pretty quiet week'. I like quiet weeks myself. For my own methodology, it's much easier to make money when the markets are 'quiet'.

While I will never say the market is "wrong" about a particular movement (the market isn't wrong, ever), it's focus can remain blind at brewing problems and situations. Thus, while the VIX can remain low, it's not to say there aren't problems. It's just the "market's collective focus", is not towards such problems.

And there are situations to be aware of. We've already talked in past podcasts about volatile carry trade unwinds. Some are discussing China's "hidden" debt situation (Notice I did not call it a problem). It's "a data point" to be aware of. When you are aware of the situation, then it's much harder to be "shot in the back by an amateur", to quote John Wayne.

So let's dive into a recap of the markets overall, as well as my brief comments regarding China and it's debt in the following week in review podcast ...

(Podcast Included. If you're seeing this entry elsewhere and cannot play the podcast? Click this link to go to the exact podcast entry ...)

Click here to Download this Podcast.

Here is a link to a podcast where I specifically talk about, and explain the credit markets.

Here is a shot of the recent bond curve ...

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Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have over 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.


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