Monday, May 16, 2016

Lack of Volatility

Those that are using support levels to try to get long or resistance levels to get short have had very little time to buy near the lows or short near the highs.  The market spent very little time under ES 2040 and also very little time over ES 2070.  That is what happens when you have the majority who think the market is range bound and are looking to buy the bottom of the range and sell the top of the range.  It is frustrating for those of us waiting patiently to get in and missing buying opportunities and selling opportunities by looking for perfect entries at the bottom or top of the range.

This will not last for long.  There is just too many potential negative catalysts for this market to stay this quiet.  Lots of uncertainty, such as Brexit, the election, and overall weak earnings and potential crash in China.  The only positive catalyst I see is QE4.  And that will only happen if the market goes down first.

This is definitely not my type of market, but I know things will change and get more volatile.  The VIX curve is in extremely steep contango, which is a good indicator of future volatility.  Perhaps end of May/beginning of June will provide the last good shorting opportunity in S&P before the market embarks on a downtrend.


shzhning said...

your overall tone has been increasingly frustrated and impatient with ES. but instead of waiting for a perfect opportunity to get in, have you thought about looking at other markets, like forex/grains/energy ?

Market Owl said...

I have traded forex, grains, and energy plenty of times before. I only trade them in certain specific situations, when the trend is strong. Right now, those 3 are rather trendless. If I am going to trade a range market, I would much rather trade ES than CL or EURUSD.

MM111 said...

Do you think the decline surrounding Brexit has begun?

Market Owl said...

it should begin after options expiration this Friday