Fear does funny things

Volatility.

The exchange traded note, which provides leveraged exposure to VIX futures, has been rising on Eurozone debt fears and weaker economic data. The CBOE Volatility Index or VIX is known as Wall Street’ fear gauge and it tends to move in the opposite direction of stocks.

TVIX on Thursday rose above its 50-day simple moving average for the first time since late 2011.

If you were gutty enough, or crazy enough, and you bought this fund on Tuesday of this week, you cashed in to the tune of 43%. Shazam. What is the play? Fear. You are betting that fear and uncertainty will reign. The dark side. Dark side bets have to be timed exquisitely, and this week it would have been exquisite. Today alone, this thing did 13.33%. That’s obscene. But how much money you would lose playing around with this thing on just about any other day of the year would also be obscene.

I pulled a lot of 403b money completely out recently. I own a bit of this stuff but watch it like a hawk and constantly re-evaluate where I think the narrative is going. The last time this stuff went down, anytime the government types came out of a meeting, everyone jumped back in the pool. Safe again? Well, er, short term, yea, ok, but longterm? Look where we are now. Were we “safe”?

What it comes down to for me is the total incapacity of a career politician to understand that you can’t print, borrow and spend your way out of where they are now. And the average German taxpayer, is, or SHOULD, get mighty p***d o*f that because they kept their house in order, they now have to hose out cash and value to a nation that refuses to come out of the ballpit at the playland. It’s game over. Just the exact timing and nature TBD. I figure a weekend will be the time the plug is pulled if it is somewhat planned and orderly. If it slips out of their tenuous “control” (used loosely), it could be any time, but a weekend makes sense for the final jump.

Like in Seismology, the big question is: are we going to have a lot of little tremors that add up to the big one, or just have the big one. Game on. Good luck. BE CAREFUL. Praying won’t hurt either–it works for me.

Good thing I’ve got this TDAmeritrade account…

Because the markets are going wild, everyone is in their online TDAmeritrade account streaming quotes.  It’s to the point that while I can log in, that took 5 minutes and I can’t really get off the home page.  I guess all the nifty streaming tools are robbing all the overhead from the servers and I can’t trade even if I want to.  When the market gets crazed, and the servers have trouble keeping up, you’d think they’d curtail automatically, some of the more heavy handed streaming stuff, to free up resources for people to actually make a trade!

Don’t listen to me.  I’m not Kramer.  But here’s one of my brainstorms.  MRO: Marathon Oil.  Was at 63 a few weeks ago when I told my pop that sometime in the next 5 months, it would be down to 40, at which time it would be a buy and sure to be back at 60+ in the following 12 months.  Easy money, right?  Well, a little after the open today it was at 43.50 and now, it is 46+.  That’s some volatility anyway.  the best thing to do with cash on the sides now is wait….wait….wait…. and laugh.  It’ll all be coming down in the next 60 to 90 days, just slower now that the Fed has panicked and popped a .75 cut in there in the wee small hours.  What would Bono say?  “…Sorry about the rest of the world’s markets…didn’t mean to bug ya…” hahaha.