The “pain trade” is back…
That means for traders it’s a good time to consider smaller position sizing, wider stops and much more discerning execution.
– Smaller size to reduce total exposure
– Wider stops to account for illiquid, volatile trading conditions
– Discerning execution to limit overtrading
— Markets & Mayhem (@Mayhem4Markets) August 6, 2024
For example, if you backtest, your strategies from low volatility regimes may not work in high volatility regimes.
That’s one reason I have been adamant about the idea of regime-specific backtesting.
It improves one’s hit rate and the potential accuracy of data from your tests.
— Markets & Mayhem (@Mayhem4Markets) August 6, 2024
Below is the $VIX relative to credit spreads.
Credit risk correlates to volatility.
What do you notice on the far right?
Do you understand why I’m saying Japan is the spark?
That the main event is junk debt imploding? pic.twitter.com/2rICBcCUy4
— Michael A. Gayed, CFA (@leadlagreport) August 5, 2024
BREAKING: In the span of three weeks, $6.4 trillion has now been erased from global stock markets, per Bloomberg.
— unusual_whales (@unusual_whales) August 6, 2024
Bloomberg U.S. Financial Conditions Index pic.twitter.com/n5nmvjiOoR
— Win Smart, CFA (@WinfieldSmart) August 6, 2024
“Policy Is Not Restrictive” pic.twitter.com/9SuIopaIhI
— Win Smart, CFA (@WinfieldSmart) August 6, 2024
US breakeven inflation pic.twitter.com/ZxiSY6OwJ7
— Win Smart, CFA (@WinfieldSmart) August 6, 2024
#SPX, 1d
2020 vs 2024
Today’s candle is very similar to that formed in the 2020 crash. pic.twitter.com/KN4Q7iPNZI
— Yuriy Matso (@yuriymatso) August 5, 2024
How the Yen Carry Trade Blows Up
In just 90 seconds! pic.twitter.com/J38dFzDVFj
— Travis Hoium (@TravisHoium) August 5, 2024
