1998 Redux - Update

By: Erik Swarts | Fri, Aug 5, 2011
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Monday evenings note (see Here) concerning the similarities in market conditions with 1998 is replicating along very similar lines - both in seasonality, price and volatility. After yesterdays extreme move lower - the downside target is coming into equal proportions to 1998. Following this analog - risk appears tilted towards further weakness in the equity markets in the near term. With that said, another leg down will likely be contingent on further exogenous propellant from Europe.

Here is an updated chart after yesterday's close.

VIX SPX 1998

VIX SPX 2011

 


Positions in UUP & GLL

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Erik Swarts

Author: Erik Swarts

Erik Swarts
Market Anthropology

Although I am an active trader, I have always taken a broad perspective when approaching the markets. I respect the Big Picture and attempt to place each piece of information within its appropriate context and timeframe. I have found that without this approach, there is very little understanding of ones expectations in the market and an endless potential for risk.

I am not a stock picker - but trade the broader market itself in varying timeframes. I want to know which way the prevailing wind is blowing, where the doldrums can be expected and where the shoals will likely rise. I will not claim to know which vessel is the fastest or most comfortable for passage - but I can read the charts and know the risks.

I am not a salesperson for the market and its many wares. I observe it, contextualize its moving parts - both visible and discrete - and interpret.

I practice Market Anthropology - Welcome to my notes.

Erik Swarts is not a registered investment advisor. Under no circumstances should any content be used or interpreted as a recommendation for any investment, trade or approach to the markets. Trading and investing can be hazardous to your wealth. Any investment decisions must in all cases be made by the reader or by his or her registered investment advisor. This is strictly for educational and informational purposes only. All opinions expressed by Mr. Swarts are subject to change without notice, and the reader should always obtain current information and perform their own due diligence before making any investment or trading decision.

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