Suppress Volatility at All Costs: Markets in Turmoil

The semis lost 10% this week. But more than that was the decapitation of areas of the market that had been strong — as people/managers look to raise money anywhere they can.

Observe the carnage in the ferts — totally disengaged from reality.

It was liquidation all day long, with intermittent bouts of life which cut me up into ribbons as I stumbled through one 3x ETF trade after the next. I traded ineffectively from a loss of 30bps to more than 100bps in a manner atypical of my usual self. The final nail in my trading coffin was the complete and sudden collapse of volatility at a time the NASDAQ was hitting new intra day lows. I have a 20% UVIX position and that position had been up 3% prior to the collapse in VIX. I am now flat in that position, holding over the weekend in case of sincere and abrupt chaos.

Month to date, I am up 3.1%. My intent is to grind out gains, 30bps here, 50bps there. As much as I would love to achieve grandiose returns, in this environment we are betwixt by hair raising short covering rallies and perpetual collapses. If you lean in heavily short on the wrong day — you might seriously find yourself down 10% for a single session — same goes with a long only position. In different markets, normal markets, I am almost always aggressive and barely hold cash. During the 2020 and 2021 extravaganzas, it wasn’t unusual to see me 150% long and pressing gains into triple digits. Now, I am almost always 50%+ cash and I take gains as low as 0.5%.

Simply stated: I am trying to survive and I am also trying to preserve my +50% YTD gains.

In other news, we continue to make progress with our options platform under development. If you want access to the beta trial, drop an email here.