Wednesday, May 31, 2023

Market Snapshot: Volatility and Breadth Signals (video)

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Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.


  1. Thanks Marty! Your analysis is right on the money. You said that one should not short the market while the debt ceiling is happening. I am a firm believer of what you say and what Mike Wilson from Morgan Stanley has been warning investors about the market for months. I believe that the volatility of the market is from all these amateurs trading options from different platforms like Robinhood or Webull. Once the market corrects itself, all these amateurs would fade away with substantial loss. The market to them is nothing but a big casino where they speculative the ups and downs. They form communities and give out trading ideas on a daily basis. I actually know a lot of people, including some family members, that utilize these kind of communities for tips on a daily basis.
    I want to end my comments with this quote from Nick Murray:
    "Timing the market is a fools game, whereas time in the market is your greatest natural advantage".

    1. Thanks Sam, good stuff... I will add that right now there is actually a massive amount of "quant" action in the market, which is different than the retail phenomenon you describe... Although, while the stats I'm about to post in this morning's note suggest it's almost entirely quant-driven of late, I do believe that what you're describing is occurring to some degree as well... To the extent that "they" are gaming the market with short-term options, rather than completely bolt, they could very well discover what they can do as the market sells off, using put options... Which of course could exacerbate the action to the downside as well.


    2. Also, with regard to market timing, there are indeed some out there who trade the short-term moves quite profitably... It is an art, and those who've I've witnessed do it well are typically very adept at technical analysis... But, per Nick M., it can be very costly... requires the utter absence of emotion, which is nearly impossible for most folks.

    3. This is the first time hearing the word "Quant". I just saw an interview of Cliff Asness by David Rubenstein. The interview is about a huge algorithm buying of value to fundamental stocks. For many years, Quant doesn't quite work out until recently in the late 2022 to current trading session. It is all about buying cheap stocks that have great value with strong fundamental.

      Thanks. I learn something new about Quant!