If 2018 felt a little bit different, that's because it was.
The days of leaving your portfolio on autopilot are gone.
Volatility is back, and after one of the longest bull markets in history, 2018 felt like it
was the end of times.
But really it was just the return to a normal volatility regime.
The chart next to me shows the VIX, which is the Volatility Index going back to 1990.
In 2017, the VIX made a 30 year low at 9.51.
So of course 2018 felt kind of crazy when the market barely moved in 2017.
And now the VIX, after all those fourth quarter fireworks, it's settling around in the 20s.
And what you see on the same chart that for long stretches like from the mid '90s to the
mid 2000s, 20 is actually on the lower end of the VIX spectrum.
Now really all of us who follow the stock market we could kind of feel a change happening.
I mean, you know stocks are moving when you're at Christmas dinner and your grandma is asking
you about stocks.
And she's asking the same questions everybody wants to know.
How bad can this market get?
What should I be buying?
Well we're going to talk all about it on this episode of Real Vision's The One Thing.
What's going on investors?
AK here.
So we know vol is back and in the previous episode we looked at bear markets.
And now with all these markets so deeply oversold, everybody's asking what's going to happen
next?
Well, Joe Perry of Forex Analytics came on a Real Vision recently to give us a good fundamental
and technical outlook on the S&P 500.
Check out what he had to say in this clip.
It has to be the technicals because there's so much going on right now.
We still have Brexit.
We have individual stocks, individual companies that are reporting revised earnings, like
Apple you were saying.
There's just so much going on that if there's going to be good news that comes out, market's
going to jump.
If it's going to be bad news, it's going to come off even further.
Joe recently gave us a great short trade that takes advantage of the recent bounce we saw
in the S&P from late 2018 that's going into early 2019.
His catalyst was the Elliott Wave analysis and confirmation in gold and treasuries suggest
that the S&P 500 is due for a bounce, which presents a great shorting opportunity.
He's playing it a short at 2,600, with a target of 2250, and he has a stop loss of 2650.
His time horizon for the trade is three months.
Bill Strazullo, the chief market strategist at Bellcurve Trading is also bearish on the
S&P 500, and he gives some great advice to the not so sophisticated investors they may
not be playing with futures.
I think one thing you can do for kind of a longer term person who may be planning for
a 10, 20 year time horizon, one thing was maybe not put any new money in the market.
Leave what's in there alone, but don't have good money chasing bad money.
So far less active traders something as simple as just not putting more money into the market
can make a huge difference in times like these.
And no one really mentions this option.
I mean it's simple, right?
Just step away from the market and stop buying.
Just wait until the smoke clears, because the key to be successful in markets is to
switch up what you're doing depending on what the market is giving you.
So if there's no buying opportunities, don't buy.
You've got to be dynamic.
And if that's a little bit different than what you normally hear from the financial
sales people on cable TV, well, that's because it is.
And I mean when is the last time you heard an interview where they tell you not to buy
more?
Now of course, some of you out there are hardcore traders and you're looking to make a big win
here.
Max Wolff has a good short idea for you.
Buying tech up is about buying the future, right?
It's about hope for tomorrow.
This not a hope for tomorrow world, right?
It's a world between people who think it was good enough a year ago and people who want
to celebrate return to the 18th century.
So his idea is to short Apple.
The catalyst is that the stock is overextended and the company is too dependent on iPhone
sales.
He's trying to short it at current levels with a target around 120, and his time horizon
is one year.
Now obviously shorting is the riskiest of all these options we discussed, and it's probably
more suitable to more sophisticated investors.
But over and over again we're seeing the same pattern on Real Vision.
None of these experts think 2013 was a one off evemt.
They all think that more volatility is coming in 2019.
And on Real Vision we've been sounding the warning
bells for the last six months.
Our experts have, one, been warning about how inflated the market is, even as we were
hitting highs last summer.
Two, they've been giving you the support levels that either need a hold, or if they are broken,
would accelerate the sellling.
Three, they've been breaking down the international macro environment across all key asset classes.
And four, they've been laying out strategies to not only protect your money in a bear market,
but how to capitalize on it.
Now contrast that with what you normally hear from financial media.
They always tell you that the market always goes up, and that when things are crashing,
that's the time to buy, because it's a great deal, right?
And of course, the best thing they always say is that it can't go any lower.
And that's never true.
With markets like the way they are, it's even more crucial that you're getting your information
from the right place.
So if you want to do that, make sure you sign up for Real Vision.
I'll see you next week.