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Friday, November 24, 2023

Very unpredictable market environment could turn volatile Black Friday

Trading Activity Around Holidays

Seasonality often plays a part in any investor's trading strategy. Some holidays in the U.S. market provide periods of decreased trading volumes, as many investors and traders are busy with vacations and family plans. There tends to be little business news released right before a holiday, too.

 With volume so light, it's possible to see very unpredictable trading.  

This in part explains the low $VIX, which was hammered down over the past several weeks, just as it was around the time of the 4th of July holiday. It's almost comical that this is the only market environment, in which the bulls can seem to stage a market rally.  

Here's what I'm seeing on the $VIX: 

You have the majority of investors believing that this rally is based on AI, and a possible "soft landing", and every other ridiculous excuse the financial matrix media can come up with, and at the same time they are very careful not to report on how short covering - ahead of the holiday - has contributed to the rise in equities. That sets up a very complacent market environment. 

Watch the Bond Market 

It was not so long ago, that the financial matrix media were telling us to fear the bond market, and that was about the same time I sent out a newsletter, in which I informed my followers that I was piling (the 401k) into a bond fund, and that trade worked great as we saw the bond vagilanties cover their shorts, ahead of the holiday season.     

To refresh your memory: 

Bill Ackman covers a bond bet because there’s simply too much risk out there to not do so.

Black Friday 

Today is Black Friday, and the market closes early, so don't expect much market movement. It's not technically a banking holiday, but most traders are on vacation.   

But when trading returns to somewhat more normal volume in Dec., anything can happen, and I'm a little afraid of the possible backlash... I mentioned earlier (above).

I've already exited the (long) bond trade (on Wed.) and I'm planning to send out another newsletter, warning my people. 

Have a great weekend, and try not to run up your credit cards on this Black Friday, as I believe we may be looking at a very gloomy 2024, and beyond.  



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