Welcome back, Dear Readers and Happy New Year!
I know, last week was officially the new year, but for market purposes it was distorted by being a holiday week. Now everyone is well truly back at their desks and sitting behind their screens (moment of nostalgia for the old trading floor?sigh) and we can truly take a fresh look at the market.
As I have written before, there is a great deal of seasonality in the stock market. And, January is seen as a very significant month and a serious indicator of how the year may unfold.
According to the Stock Traders Almanac, the month of January tends to predict the direction of the market for the remainder of the year with a 91.4% accuracy ratio, with only five major errors recorded since 1950, including last year.
Well, at this writing (9:45 CST), the Dow is?unchanged, so we?ll have to wait and see a bit more
It is, after all, only January 5 and we have plenty of month left, but we?re not exactly starting with a great deal of conviction, are we?
The CBOE volatility index, the VIX. seems very low to me right now at 11.61.?Less than a point away from its 52 week low of 10.93. This suggests to me an unhealthy level of complacency in the market.
What this means to me is opportunity. The beauty of exchange traded options is that they allow you to make money in any market, up, down or sideways.
OK, then, it is 2017 and I wish all of you prudence, patience and prosperity.