HAR

VIX below 20 signals risk on

Markets have been uneasy for a rather long time now. Well, uneasy is perhaps a mild way to put it. Markets have been uneasy for the last few months, maybe, but just over a year ago markets were in a full-blown panic. Thankfully those crazy times have passed. Over the last two weeks, we’ve even seen the VIX below 20, which is something that has not happened in a mighty long time. Lower volatility signals higher risk appetite and we think a VIX below 20 signals risk on in equity markets.

No pullbacks, only new highs please

Markets bounced hard in the second half of last week. It’s almost hard to believe how fast things are changing in the current landscape. Although there are so very many reasons to be cautious, if not flat out bearish, the market is just pulling its ears back and making its way higher despite the conditions of the world around it. Thus, given the strong footing the market ended on last week, and of course the charts, we think that we’ll likely see new highs in the week ahead.

Buy the dip?

Well, after all that bearishness, all we got was one day of #marketcrash trending on twitter and a bounce so glorious I’m sure people will be singing songs about it at some point in the future. It seems that ‘buy the dip’ is not dead just yet. In truth, the irrationality of this whole market is starting to scare me a little, although I am not going to fight the ‘buy the dip’ crowd.

A dose of patience needed

The fast paced world out there always tries to get us to take action immediately. There is a sense of urgency that is ever pressing. You have to buy this useless trinked right now! You have to act now to make money on the stock market! Cryptocurrencies are exploding and you must act immediately lest you want to ‘enjoy staying poor’. This is all garbage. The reality is that there is a lot of patience needed if you want to make any sustainable, long-term progress. The same is true with trading. The patience needed to wait for the right trades, at the right levels is something that almost never talked about. So although there are a few decent setups this week, there are a few markets on which we have to respect the patience needed and wait for a more clear setup.

The trend is strong with this one

The U.S. market is closed on Monday for Presidents’ Day, which means that our market will likely be rather quiet at the start of the week. Overall though, the bullish trend is strong and has been for some time. I rang some alarm bells last week, although it seems that I was wrong. This doesn’t mean that we should all rush out and put on a thousand new long positions. Patience, caution, always.

Can’t stop. Won’t stop. GameStop.

Oh, the madness that is 2021! Never in my life did I think I would see a bunch of internet nerds take down hedge funds and brokerages… just for the lols. But here we are; Robinhood is basically dead in the water, Melvin Capital has offered a job to u/DeepFuckingValue (who made $46 million on GameStop since October 2020), Wall Street losses on GameStop and other heavily shorted stocks are tracking well over $70 billion and there is no sign at all that the Redditors have any intention of stopping. It boggles the mind!

Hurricane trade ideas

The weather in the northern parts of South Africa is likely to be a little wild in the week ahead. We just hope that the hurricane that has made landfall in Mozambique does not cause large scale damage. Spending the week indoors, sadly, is nothing new thanks to lockdown. Now we just have to hope that the coal stays dry so that we don’t have electricity disruptions. These are strange times to be living in to be sure. At least we have markets to look at and keep us busy while a hurricane and a virus rage outside.

Scroll to Top

We'll help you choose the right account.

Please give us your contact details so that we can call you and help you choose the most suited trading account for your individual requirements.

Your message is on its way to us!

We will be in touch with you shortly.

In the meantime, check out our other pages with the drop down below:

We really appreciate you reaching out. We will be in touch with you within two business days.