With India VIX, at 30 this short term volatility where global indices move 3-5% at times is going to be around. The VIX should however eventually decline back to 20 in a bullish market. I would like it to stay there
as some volatility is good. the 2013-2019 low volatility market that has made options selling appear like ice cream with a cookie should end. Writing is for experienced and scientifically driven investors. Remember you are selling insurance to someone, and even that requires some qualification. It is not a zero risk product.
That said our markets are in the process of building a series of higher tops and bottoms medium term, that is the definition of a trend. If you do not like the market because of COVID, let me tell you that is exactly why I like it after a long time.
After a 2 and a half year bear market in Midcaps and even longer in some stocks for the first time in years there is value on the street. And it would be so if news was not bad. Whoever heard of a stock market bottom on good news of economic growth and a virus cure? You think if that happens and makes front page news on that very day you will get to buy at these prices? Mostly someone will have front run that news by months.
That is what happened yesterday, the market went up anticipating the most dovish FED in the month before and sold off on his announcement of endless bond market intervention till 2022 with no fear of inflation.
That is why the biggest bet is inflation
Let me leave you with My Insiders video update from this morning on the near term market setup. I publish this everyday to Subscribers.
Rohit Srivastava
The Truth About the Markets
