Making Sense Of Volatile Markets | The One Thing | Real Vision™

AK searches through Real Vision for answers to the question: What the hell is going on in the markets? And what should investors do now?

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Making Sense Of Volatile Markets | The One Thing | Real Vision™

Transcript:
If 2018 felt a little bit different, that's because it was. The days of leaving your portfolio on autopilot are gone. Volatility is back, and after one of the longest bull markets in history, 2018 felt like it was the end of times. But really it was just the return to a normal volatility regime.
The chart next to me shows the VIX, which is the Volatility Index going back to 1990. In 2017, the VIX made a 30 year low at 9.51. So of course 2018 felt kind of crazy when the market barely moved in 2017. And now the VIX, after all those fourth quarter fireworks, it's settling around in the 20s. And what you see on the same chart that for long stretches like from the mid '90s to the mid 2000s, 20 is actually on the lower end of the VIX spectrum.
Now really all of us who follow the stock market we could kind of feel a change happening. I mean, you know stocks are moving when you're at Christmas dinner and your grandma is asking you about stocks. And she's asking the same questions everybody wants to know. How bad can this market get? What should I be buying? Well we're going to talk all about it on this episode of Real Vision's The One Thing.
What's going on investors? AK here. So we know vol is back and in the previous episode we looked at bear markets. And now with all these markets so deeply oversold, everybody's asking what's going to happen next? Well, Joe Perry of Forex Analytics came on a Real Vision recently to give us a good fundamental and technical outlook on the S&P 500. Check out what he had to say in this clip.
It has to be the technicals because there's so much going on right now. We still have Brexit. We have individual stocks, individual companies that are reporting revised earnings, like Apple you were saying. There's just so much going on that if there's going to be good news that comes out, market's going to jump. If it's going to be bad news, it's going to come off even further.
Joe recently gave us a great short trade that takes advantage of the recent bounce we saw in the S&P from late 2018 that's going into early 2019. His catalyst was the Elliott Wave analysis and confirmation in gold and treasuries suggest that the S&P 500 is due for a bounce, which presents a great shorting opportunity. He's playing it a short at 2,600, with a target of 2250, and he has a stop loss of 2650. His time horizon for the trade is three months.
Bill Strazullo, the chief market strategist at Bellcurve Trading is also bearish on the S&P 500, and he gives some great advice to the not so sophisticated investors they may not be playing with futures.
I think one thing you can do for kind of a longer term person who may be planning for a 10, 20 year time horizon, one thing was maybe not put any new money in the market. Leave what's in there alone, but don't have good money chasing bad money.
So far less active traders something as simple as just not putting more money into the market can make a huge difference in times like these. And no one really mentions this option. I mean it's simple, right? Just step away from the market and stop buying. Just wait until the smoke clears, because the key to be successful in markets is to switch up what you're doing depending on what the market is giving you. So if there's no buying opportunities, don't buy. You've got to be dynamic.
And if that's a little bit different than what you normally hear from the financial sales people on cable TV, well, that's because it is. And I mean when is the last time you heard an interview where they tell you not to buy more?
Now of course, some of you out there are hardcore traders and you're looking to make a big win here. Max Wolff has a good short idea for you.

[Macro-Ops]

Wow this AK guy is amazing! And good looking.

[michael]

Shorting apple is a dumb idea. It just hit 10x forward P/E. Every time that has happened in the last 10 years the stock rallies at least 2x in the next 2-3 years

[bradpassmore]

I feel like I just started watching MTV! Not Real Vision and I hate MTV!