“As I struggle to find the words to communicate my thoughts, I worry they will be misconstrued. Yet I don’t know how else to say it – except to blurt it out. So at the risk of being labeled a fool, here it goes – it’s different this time.”
Or, put differently, how much would it take to break the spirit of market participants who have been conditioned, Pavlov style, to buy any dip no matter how small?
“If you’re holding cash”…
Then they went skiing.
End of story.
There are lingering questions.
…that was a 23-standard deviation event. I’m not sure what color swan that is – maybe psychedelic?
In that same kind of way where that festering hornets’ nest in your garage isn’t a problem anymore…
“I was up until the wee hours, checking my phone to see where VIX futures were trading.”
“The market’s addiction to low volatility may be even more severe than its addiction to low rates.”
“We suspect the retail investors that have been wiped out by this trade may not be too keen to trade volatility going forward.”
The fallout continues.
“It seems like just yesterday the overly confident bulls were openly taunting any market participant that dared counsel about the increasing risks in the equity market.”
It’s over folks.
And so, legions of retail investors, hordes of previously cock-sure newly-minted “money managers”, and scores of popular pundits who swore to you they knew what they were talking about, are left to ponder the stark reality of a market structure-driven nightmare scenario.
Good luck, we’re all counting on you…