Goldtent TA Paradise

These are always good indicators to be aware of but it always amazes me how many people try to time and trade a market crash. You don’t build a solid football team based on Hail Mary passes and constantly positioning yourself for a crash that happens a handful of times in a century just doesn’t seem like a solid approach to building wealth. I’m not referring to anyone on this board when I make these comments but am really just reflecting on all the articles I see out there right now plastering the internet. Folks who are certain that junk bonds, rising Fed rates, and extreme levels of margin debt are going to crash the markets. Markets and fundamentals can be incredibly weak and we could even have war and that doesn’t mean the markets are going to crash. Just stick to your trading/investing plan in the context of your time horizon is my advice.

Looking at the charts provided above it seems SKEW goes up after a prolonged runup in the markups where the “perceived” risk of a crash is greater and traders start buying more low strike puts. It will be interesting to see if the purchase of out of the money put insurance is simply being applied more these days and past levels may not be as good of an indicator as it used to be. Interesting to think about for sure.