Obviously we are having a breakout day with the SPX up — at one point — 17 points. The Dow up about 150. We joined the buying panic and bought more UPRO, more QLD, some Euro FXE… to add to our scale in positions in GDX, GLD.
Wonder what those people who thought the top was in 200 points ago are doing. Well, it never pays to listen to chicken little. He is always trying to get you to eat more beef.
Also, watch out for falling sky:
It is the characteristic of volatility to revert to the mean. Extraordinarily low volatilities, such as we have presently are often the prelude to market explosions. No one know which way these explosions will rocket. So option pros often buy straddles to deal with both possibilities. It is also possible that the breakout today is the explosion. It is like the zen saying: he who speaks does not know, and he who knows does not speak. Well, we don’t know either, but be prepared for explosions with the volatility this low.