I recall the final scene in a 1983 movie called Trading Places, featuring Dan Aykroyd and Eddie Murphy, where they had the Duke brothers (Randolph & Mortimer) on the run with an orange juice trade. As the market was climbing and the Duke's were buying hand over fist ahead of the crop report, Aykroyd turns to Murphy and says: "Not yet, almost." They finally look at each other with a gleam in their eye, and raise their arms and sell the futures contract into the furious rally...a few minutes later, they show the television and the speaker releasing the crop report saying something about not having a cold winter...and the contract immediately crashes. The Duke's were now on the wrong side of the trade. Moments later, we see Aykroyd and Murphy buying back their positions as fast and furiously as they had recently sold them, for a fraction of the price!
That's where we are with the market right now. There are dislocations all over the place. There will be a time to buy, but it isn't right now. The key is to maintain buying power and plan for the day when you can buy and take advantage of the opportunities.
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2 comments:
The CBOE VOLATILITY INDEX or Vix is at levels not seen since 2002,but the extent to where the size of the spike from where it first started to where it is right now is unprecedented. It is my opinion that you would want to have a day that the Vix falls 4-5 points that could signal end of the capitulation.
Debttrader, excellent insight. Thank you for visiting our blog.
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