In the context of end-of-the-world financial bloggers, and republican politics, I pulled out some Henry Miller this morning. Admittedly I was hungry as well.
Henry Miller (Children of the Earth)
- “To condemn the whole structure of society does have a ring of madness. More particularly when nothing tangible, nothing specific, nothing remotely resembling a panacea, is proffered.“
And to go with Henry, John…
I’m a huge fan of McMillan on Options by Lawrence G. McMillan. At one point he discusses the relationship between peeks in volatility and changes in direction. You should read this book if you haven’t.
- “An extremely high implied volatility reading, especially if it occurs as a spike, is generally a sign that a short-term bottom is as at hand for the broad market“.
The case study he builds dates between 1997-1999 and the VIX buy signal highs that he graphs are between 33-39, but cautions that the VIX ‘values’ should be viewed in context to the market and not be taken literally. The peaks he saw were caused by the Russian debt crisis escalating out of control, and the failure of Long-Term Capital, a massive hedge fund.
I’m sensing some parallels recently, as I noted in “Marketing a Country” and in “Mr. Soros is Sending My Money Back“.