RE: Markets always bounce...3 Sep 2020 20:43
Yes I thought it was a bit of dirty dog market manipulation but the vix is till going up.... I've just been back through my vix, vilx, FT350 records for March and the similarlity is uncanny, FT didn't really show anything in the first week, but the vix and xilx did. Second week a bang MOnday opn, then Thursday and Friday (always the FT100 bad days) with a recovery of sorts on Wed, Anyway it's a 5 week pattern so I won't bore you - the thing is you are right, there were recovery days when it was good to get out and then fall days when it was good to buy the close (at least a little flutter) and of course sell Vilx at the same time. So yes there is always a way to make money - but you need a hedge. Myhedge is the vilx - because I remember the 3UKS and 3ULS spreads were horrible during this period but the vilx spread is never that abd and it's beta is prodigeous. I reckon with 10% VILX in your portfolio you will cf your index tracking shares you will always be able to cover any pullback - whereas obviously you would need 25% 3UKS or 3UKS. The downside is VILX is a pain when the markets are happy because it decays about 5% per week. My tip for anyone trying this is go for 5% VILX - get used to using fixed price buy and sell orders, and if it works for you - increase it to 10% when you suspect a **** storm like this is kicking off. My advice to anyone is always watch what the vix is doing - it does oftne predict a change in direction in the market by a day or so - which is exactly the edge we need, GLA. M