Market Mavens – Stock Research Made Simple

Make This Trade The Smart Money’s Betting On

While stocks were likely oversold to end 2018, the action in January has been far more bullish than many expected.  It’s easy to say that there’s too much buying going on, just as many thought there was too much selling over the last three months of last year. But, stocks have a way of moving in waves, especially when volatility is higher than normal.  We had a selling wave in December and now a buying wave in January.  Are we going to have another selling wave in February or is the rally going to continue?  Or, are we going to move sideways for a while? Predicting market direction is never an easy task.  That’s true no matter how much experience you have, how advanced your research tools are, and how many resources you have access to.  There are simply too many variables to know for certain. However, market volatility can be more predictable.  That doesn’t mean it’s easy to trade volatility or volatility products.  However, volatility models do tend to perform better when it comes to forecasting than directional models. That means if I come across a big volatility trade (using ETFs or otherwise), I certainly pay attention to it. 

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