35-Year Trend of Resistance In Effect, Adding TVIX
In 2008 the DJIA returned to lows it hit 6 years previous, and 10 years previous.
That's shown by the blue horizontal line on the chart below.
A few years of gains, even a decade's worth, being erased in a quick reversion is not historically uncommon.
Losing 6 years of gains now would require a 46% drop to the pink horizontal line on the chart below.
That'd be remarkable, but not surprising in a long-term context.
Losing just 2 years of gains, or only about 20%, would revert the DJIA back to the orange horizontal line on the chart below, which also corresponds to a 10-year up-trend shown in green.
Are any of these scenarios impossible? Unreasonable?
No.
35-year trend of resistance (red) in effect:
Many think stocks will never drop again. We've heard that before, usually at major market tops.
They may finally be right but we're always happy to bet against the lemming herd, especially when they seem to be stampeding off a very high cliff.
We'll do so by adding a 2nd TVIX position once it rises to $7.70
Earlier this year we traded TVIX for a gain of 43% in just few days.
We entered it again earlier this week.
TVIX last traded at $7.35
History repeats, because human nature never changes.
It's not different this time.
That's shown by the blue horizontal line on the chart below.
A few years of gains, even a decade's worth, being erased in a quick reversion is not historically uncommon.
Losing 6 years of gains now would require a 46% drop to the pink horizontal line on the chart below.
That'd be remarkable, but not surprising in a long-term context.
Losing just 2 years of gains, or only about 20%, would revert the DJIA back to the orange horizontal line on the chart below, which also corresponds to a 10-year up-trend shown in green.
Are any of these scenarios impossible? Unreasonable?
No.
35-year trend of resistance (red) in effect:
Many think stocks will never drop again. We've heard that before, usually at major market tops.
They may finally be right but we're always happy to bet against the lemming herd, especially when they seem to be stampeding off a very high cliff.
We'll do so by adding a 2nd TVIX position once it rises to $7.70
Earlier this year we traded TVIX for a gain of 43% in just few days.
We entered it again earlier this week.
TVIX last traded at $7.35
History repeats, because human nature never changes.
It's not different this time.
posted by C. Guinness @ 2:32 PM
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