Which color do you like better? Green or brown? I’m partial to the green curve myself. That green curve comes from writing puts…sort of. Writing puts can be a lower volatility play that makes you money in choppy or flat markets, falls more softly in down markets, and seriously under-performs when the market goes on a tear upward.
Happy new year! It’s that time again, when everyone with a blog does a wrap up of the previous year. Here’s my look-back.
Many of you follow along with the “+/-30% per quarter wider-market breadth indicator”. Which is too much of a mouthful, so I’ve humbly named it after myself instead. I wanted to provide an update since I’ve been tracking it for awhile.
Aren’t calendars wonderful? A couple of days ago, up pops a reminder on my calendar to revisit a post I did a year ago. At the very beginning of 2016, I wrote a post on whether yearly performance was mean-reverting, and found some interesting things. You might want to go back and take a look first, before you continue reading here.
Earlier this year I posted a link to the indicator data, so you can see for yourself. As per recent request, I’ve updated the data in the Google Sheets document. Here’s a link.
It actually turned red on October 25th, but I was away on vacation and couldn’t update it right away.
Interesting to compare how low the indicator is, as compared to the S&P 500. While the SP500 has traded in something of a range since the drop on 9/9/16, the wider breadth indicator has taken a serious plunge over the last week.
What does it all mean? How should I know?! Why do you ask me those silly questions anyway?