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"I think we're seeing fear fatigue," says money manager Darell Krasnoff. Clients of his out of...

"I think we're seeing fear fatigue," says money manager Darell Krasnoff. Clients of his out of stocks for some time are calling and asking to get back in. It's the same story at Fidelity and Schwab (SCHW), both seeing marked increases in trading activity. The Vix (VXX)? It declines even on days when the markets sell off.
Comments (29)
  • it's a new secular bull!
    even Greece bottomed
    19 Feb 2013, 08:10 AM Reply Like
  • Kicking myself for not buying NBG, can't win them all I guess
    19 Feb 2013, 01:22 PM Reply Like
  • We are near an obvious top when there is no fear.

     

    When there is nothing but fear (e.g. February 2009) we are at an obvious bottom.
    19 Feb 2013, 08:23 AM Reply Like
  • There's a huge difference between "fear fatigue," evidenced by just the beginnings of the reversal of funds flows seen recently, and the kind of euphoria that indicates market tops, as seen in 2000 and 2007.
    19 Feb 2013, 09:17 AM Reply Like
  • you are so right and you hit the nail on the head. we are not ridiculously bullish with outrageous upside targets - when that happens, we're at the top.
    19 Feb 2013, 09:29 AM Reply Like
  • That`s what they were saying in late 2007.
    19 Feb 2013, 11:57 AM Reply Like
  • DVL:

     

    I'm assuming that's some skeptical response to my response to your prior comment. Let's examine the period you mention.

     

    At the end of 1997, the SPX resided at 975. By the end of March 2000, it was at 1527. Looks to me as if that's a 57% gain.

     

    Now, if, instead, you are referencing the pullback in the late summer of 1998 and suggesting that's what lies ahead now, I'd respond that 1998's sell-off was occasioned by the panic surrounding failure of Long-Term Capital Management in the Russian currency collapse and had nothing to do with the the indices being overextended, as subsequent events emphatically demonstrated.
    19 Feb 2013, 12:07 PM Reply Like
  • There is nothing to fear but fearlessness.
    19 Feb 2013, 08:49 AM Reply Like
  • Fear is the mindkiller.
    19 Feb 2013, 08:53 AM Reply Like
  • Fear spelled backwards is "RAEF". ; )
    19 Feb 2013, 09:05 AM Reply Like
  • No more gas stations in the view..... The markets will only go downhill between now and mid March 2013 with a steep loss.
    Mark this post..... I am a bear for now....
    19 Feb 2013, 09:14 AM Reply Like
  • The major brokerage firms are announcing that their clients want to "get back in", long after the market has steadily inched upwards since the middle of November. A low VIX is a warning to be prepared to close long positions and open new shorts. Of course, the poor hapless long-term investor who only knows how to buy the market will get in just as the market reverses and that same investor will get burned again, with the help of their equally clueless "financial advisers".
    19 Feb 2013, 09:32 AM Reply Like
  • Jump in, use STOPs..not rocket science. Anyone whose not been riding the rally since March 2009 needs to have head examined closely :).
    19 Feb 2013, 02:55 PM Reply Like
  • Talk about the mind games!

     

    No fear? We're at the top! Full Bear!
    Wait! I just said "bear" that means we're at
    the bottom! Full Bull!

     

    How about this:
    Everybody is calling an "inflection" point so the contrarian
    view would be it's neither a top or bottom.
    It's just somewhere in between.
    19 Feb 2013, 10:35 AM Reply Like
  • >>The Vix (VXX)? It declines even on days when the markets sell off.

     

    Hey Darell Krasnoff
    VXX declines because of futures contango. Check my VXX instablog which covers this issue. VXX is a failed product offering for those looking to get long vol. It's a much better opportunistic short candidate.
    19 Feb 2013, 11:10 AM Reply Like
  • you cannot short the VXX. That is the dumbest thing i have ever heard.

     

    Volatility has become a catchword for the market being up. The market now predicts very little movement, which should be a sign that it will probably move dramatically.

     

    You can't short the damn VXX, so stop being silly. Its perpetually HTB and the put premium is massive because everyone knows it will suffer from decay. People with billions of dollars are not going to leave an easy win like this behind for you to find it, tail.

     

    On the other hand, the relevant VIX is at 7 year lows, that's always the best time to be short, right?
    19 Feb 2013, 12:59 PM Reply Like
  • I'm confused by your comment. You can short VXX. I've done really well shorting it. In the last year its down 79%. Look at a 3 year chart and it looks like an escalator going down. Are you referring ti the VIX?
    20 Feb 2013, 03:44 PM Reply Like
  • "you cannot short the VXX"

     

    My brokerage account refutes you. 13,000 shares.
    20 Feb 2013, 08:30 PM Reply Like
  • The VIX can remain at present levels for years: http://yhoo.it/IdkE56?s=^VIX+Interactive#sy...

     

    That link got mashed. Look at a long term chart of the VIX. It was at these levels for years in the mid-90s, mid-00s.
    19 Feb 2013, 11:23 AM Reply Like
  • The markets are a probability game, and probabilistically speaking the direction could just as well be up. Receding fear + higher profits = multiple expansion.
    19 Feb 2013, 11:34 AM Reply Like
  • Can after tax profits expand at the rate that they have? If so, how?
    19 Feb 2013, 11:54 AM Reply Like
  • you cannot short the VXX. That is the dumbest thing i have ever heard. The VIX is as broken as the VXX and you might as well use gold as your bear-long because its going to rise when the market falls, at least at first.

     

    Volatility has become a catchword for the market being up. The market now predicts very little movement, which should be a sign that it will probably move dramatically.

     

    You can't short the damn VXX, so stop being silly. Its perpetually HTB and the put premium is massive because everyone knows it will suffer from decay. People with billions of dollars are not going to leave an easy win like this behind for you to find it, tail.

     

    On the other hand, the relevant VIX is at 7 year lows, that's always the best time to be short, right?
    19 Feb 2013, 01:00 PM Reply Like
  • Traders are shorting the front month VIX futures relative to the back months. Contango. VXX is a retail crap trap.
    19 Feb 2013, 02:12 PM Reply Like
  • You're going to ride the market higher forever. Whenever the sheep get back in the herd, you know shearing time can't be far off.

     

    I just can't wait to hear someone gush "it's a new paradigm!"

     

    ;-)
    19 Feb 2013, 01:38 PM Reply Like
  • All I need are some tasty waves, a cool buzz, and I'm fine.
    19 Feb 2013, 02:29 PM Reply Like
  • Stu, were'd you get that jacket!
    19 Feb 2013, 02:33 PM Reply Like
  • It does give one pause when the retail public, which recorded record outflows from their mutual funds in 2008, (at the depth of the trough) is now being reported by the major funds to be plowing back in with unprecedented zeal. So if contrary indicators are your thing, you’ve got one.

     

    Whether it's signalling a hic-up, or a cyclical turn, well..............
    19 Feb 2013, 03:06 PM Reply Like
  • I don't know how to predict the future, but there were a bunch of stocks on the TSX today and another bunch on the NYSE that hit 52 week or all time highs, so that's got me hoping for a correction or 5-10%.
    19 Feb 2013, 04:13 PM Reply Like
  • Well, I guess we saw what happened to a complacent VIX--up 19% today!
    20 Feb 2013, 09:40 PM Reply Like
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