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Dog Days, August Bears
If you think flows, liquidity, market depth and positioning matter, the outlook for US equities is somewhat foreboding.
As most readers are likely aware, August can be challenging. For one thing, VIX seasonality's bullish, and what's bullish for vol tends to be bearish for stocks.
Remember, volatility's inversely correlated with market depth. Liquidity dries up into vol expansions, setting up a self-fulfilling prophecy: Illiquid markets can exhibit a wider distribution of spot outcomes, which
Another reason why summer is the worst season, but thankfully, it’s followed by the best season, football season.
Owners of productive assets tend to do well over the long-term, so pullbacks are an opportunity to get more for your beta flow. Time and compounding are the surest ways to enjoy the freedom to step off the daily treadmill of have-to-does. Short of a wealthy benefactor.
H-Man, the tide is turning ever so slowly but with certainty. Interest rates falling, time for a new dawn.