Archive for the ‘Metals’ Category

Tough to own -

We struggle daily with owning bonds even knowing we are in a deflationary environment. Corporate Bonds look nice so dip into high grade corporate or buy the ETF index $LQD.

Here’s the investment grade corporate bond ETF:

2013-03-17_14-02-10

Lately, I constantly here about volatility from finance friends and foes. What does this mean? I know one thing it means. A strong chance of delivering you and your clients solid returns. The VIX index must come down when it is high and must spike when it is too low. By being discipline, thus selling the VIX in times of worry, and subsequently buying it when everyone is happy, you will be profitable. Let me explain more… The VIX generally bottoms around 16, but I recommend buying the fear index at 18.

At some point in the future you will get a spike for some reason or another. This is under the assumption that the world will still be flooded by debt, religious problems in the middle east, European solvency issues, etc… I imagine the world will not rid these problems for years to come, thus volatility or fear, will constantly come back.

The interesting thing is, ¬†we get immune to the fear, or a few of our massive list of world problems are solved, and the VIX index rapidly goes down. One can begin to sell the VIX patiently at the 30 level, up to 40. As you can see, from 18 to 40 is a double. You can achieve more than once in a year. The VIX is highly skewed on the up and downside. Currently the VIX futures curves is in contango. Further, The VIX bottomed at 17 and popped to 22. It is now resting at 18. Time to buy more…