One Bored Trader Finds More Ways To Get Into Trouble

Authored by Kevin Muir via The Macro Tourist blog,

Another day, and another steady grind higher in US stock markets.

In all my years trading, I can’t recall a non-summer or non-holiday period that has been as boring as the past couple of weeks. I mean, B-O-R-I-N-G. The ironic part of this snoozefest? There has actually been a fair bit of new information for the stock market to digest. Whether it is the recent uptick in wage inflation, or Trumpster’s “we will totally destroy” North Korean rhetoric, it’s not like the world has suddenly become less volatile. Yet day after day, tiny little stock market dips are bought, and we steadily rally, often closing up small. This is a trader’s ordeal. And it’s especially difficult for put-owning-bears like myself. Low-volatility-grind-highers are Amityville Horror type nightmares for me.

When will this end? Or is this trading’s new reality? Could it really be as simple as waiting for the 3 handle morning dip in the spooz, buying it with both fists, and then waiting for the end of day ramp?

Well, I can’t say for sure when it will end, but rest assured, it will. And when it does, it will catch a lot of traders off guard (pro tip – with the declining volatility, many traders are increasing position sizes, but be careful – when it turns, that increased leverage will bite back.)

Yet at the risk of making an even greater fool of myself, here is an idea for potential timing.

Too often, traders assume the centre of the universe is New York. Yeah, maybe some think it’s London, but it’s one or the other. Yet I contend that often the driving force behind markets comes from Beijing.

Remember the 2008 Great Financial Crisis? Most assume the market bottomed on the passing of the …read more


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