Well, once again Mr. Market changed his mind(or most probably in this case, Mrs Market ;-)) and the Dow dropped precipitously.
We are once again at a level where there's the very real possibility that the prior reaction low from just a few weeks ago, 17,579, might not hold.
Going into this week, there were rumblings about the potential for extreme volatility due to factors such as the clock ticking down on a Greek default and a shortened week with key Labor indicators to be released on Good Friday(market will be closed) and least we leave out, stress from the NCAA Semi's(ok, just kidding about that one..but let's throw it in anyway..might as well)
Net net, as often pounded home on these very pages, this is why The Stealthy Trader apportions the most minimal of resources to pontificating on future directional movements of our markets.
I will use the remaining space to drive home the point that sometimes it makes sense to sit on your hands and not do anything..especially if you trade for a living..or want to.
We choose to use low volume, below average participation trading periods to run scans, draw trendlines, set up alerts based on chart pattern recognition and basically stalk low risk/high probability opportunities!
One that I want to reluctantly bring to you, our Basic Membership readers, is the fact that even with all this market volatility, the Volatility Index proxies are really cheap..primarily relative to where they usually trade..we can attribute this to just pure lack of consideration for the potential for a real and swift drop.
So, about the reluctant part, the issue here is that the proxy that we run to, CVOL, can be very volatile..wait, a volatility proxy being volatile? ;-)
At the risk of constantly sounding like a carnival barker, we are able, via our "real time in the trenches methodology", to react to subtle shifts in market movement and enter/exit this low activity goldmine as we have done numerous times in the recent past for our Premium Members.
Presently, CVOL can be had for .85-.90 with a recent low around .78. At this same level in the Dow, around a month ago, it was over $1.00
Should the market give up the ghost and head south, this one could easily trade up to $1.50 in short order.
So, in conclusion, either as a speculative short position or as a hedge against your portfolios, at this price and volatility, CVOL makes a lot of sense.
And lastly, should you decide that you're comfortable with our way of thinking and trust our abilities to pick up on such subtle shifts in the market, then consider joining our many other Premium Members and between this entity and another one that we're very excited about, pay for an entire year of our expertise and guidance with either one of these 2 high probability/low risk choices.
Feel free to reach out to me at any time should you have any questions or want to go over the process of "getting involved".
See everyone in the markets!
The Stealthy Trader