Yo Pit Crazies,
We just had a historic quarter in the S&P 500.
And not in a good way.
The SPX is off to the worst start in 40 years.
Realized vol is at crazy levels not seen since the pandemic or the near collapse of the Euro a decade before that.
So, we need a plan.
Well, we have one.
Use Dividends to Smooth Out the Bumps.
The thing with realized volatility as a market indicator is …
Don’t ignore it!
Stocks are volatile for a reason.
Look at the chart below. The only time in 10 years the market has been this upended was when Western Civilization was going to end with the COVID-10 or the Euro Block would cease to with the collapse of the Euro.
30-Day Realized Vol for the SPX
Something is up.
And that something is a lot of things. The greatest hits of 2022 – inflation, Russian invasion, bad COVID policy leading to supply chain issues and … The Federal Reserve.
The Fed and the US governemnt messed up spending so much money into the Supply Chain issue and they can’t undo without draining the system.
The market is trying to price a recession that is coming.
It’s 1979 all over again. If the Fed holds the line, historically things will improve.
That takes time which is why Mark and I are introducing stock trades with protection …
That is a way to beat historic vol.
To Your Trading Success,
AG