E-Mini S&P500 Futures Volatility Forecast (07/11/2010)

We are not in a bull market.We are not in a bear market.We are in a DOPED MARKET !!!

The volatility plot shows an attempt to bring back the market to fairer prices which has been blocked by the intervention of the Fed that completely changed the situation.

The TGARCH estimation is now back to 0.4%, hence, the staff of HyperVolatility proposes you the same question we asked you for the last 2 weeks : HOW LOW CAN THE VOLATILITY GET ?

We remain bearish because of 4 reasons:

1) Market prices are not justified at all by the current economic conditions

2) The volatility bounced back to an extremely low level and this is probably going to provoke an even more violent explosion

3) Investors are buying because they are naively relying on the constant help of the Fed

4) The Fed cannot continue to pump money in the system without destroying it

We suggest watching out your longs because the first volatility rise was contained by the QE2 announcement but we do not really know if this is going to happen again.

Leave a Reply

Your email address will not be published. Required fields are marked *

Go back to top