These Kinds Of Markets Kill You: Pal

There’s literally nothing going on, Real Vision CEO Raoul Pal said during today’s Daily Briefing while discussing the collapse of volatility in the bond market, oil, precious metals, and even Bitcoin.

Pal said these kinds of sideways markets kill you because either you’re trying to time your entries and you get stopped out or you’re just sitting on options and you bleed to death because nothing is going anywhere. Whatever you think about volatility, it’s overpriced, he said, because literally all prices – even the Fed’s balance sheet – are nailed flat.

Except of course the equity market. Pal said there are indicators that the market may stop and pause here and also some signals of impending price action. The market has formed a megaphone top, and that expanding range of volatility often means there’s a trend change, he said, but he believes we’re unlikely to see any real action yet.

He said investors can always look to the bond market for the truth about what is going on. Right now, it is going sideways, which tells us that equities are unlikely to break because there’s nothing underlying that’s potentially changed. If the bond market starts breaking lower in yield, Pal said, it will tell us that the forward expected growth forecasts are changing. And when the bond market tells you that, you listen. Pal also said investors should watch the banking stocks, which look like they’re ready to break lower at some point.

Pal continued the interview with a conversation about the importance of establishing a framework for your investing strategy and how connecting with other investors can provide incredible value. He provided an overview of the cross-section of investors on Real Vision’s new platform, The Exchange, and argued that the open sharing of ideas, analysis, innovations, and learnings is a powerful tool for investors to leverage during such unprecedented times.

To wrap up, Pal addressed a question he said he gets all the time: has everything changed? He said that everything is so accelerated since COVID and now more than ever investors need to know what is false and what is a real trend change, because it can be highly profitable or highly risky depending on how you’re positioned. Pal will lead a two-week forum called “Has Everything Changed?” with experts from various industry sectors and markets to help give investors insight into how to think about things and what all of this could mean for them.

Pal’s final bit of advice for the week ahead was to look at the bond yields and the banks for a signal. He sees the price in the S&P and the NASDAQ and what it’s doing, but is not convinced yet that this is the time to pile in.

“Don’t over trade. Wait for the ranges to break,” he said. “It’s ok when there’s nothing going on; quiet time is time to do your homework.” For Pal, that means figure out where you are, what you’re looking for, and how to move forward.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: This is pretty obvious, but we should probably say it anyway so that there is absolutely no confusion… The material in REAL VISION GROUP video programs and publications (collectively referred to as “RV RELEASES”) is provided for informational purposes only and is NOT investment advice. The information in RV RELEASES has been obtained from sources believed to be reliable, but Real Vision and its contributors, distributors and/or publishers, licensors, and their respective employees, contractors, agents, suppliers and vendors (collectively, “Affiliated Parties”) make no representation or warranty as to the accuracy, timeliness or completeness of the content in RV RELEASES. Any data included in RV RELEASES are illustrative only and not for investment purposes. Any opinion or recommendation expressed in RV RELEASES is subject to change without notice. RV Releases do not recommend, explicitly nor implicitly, nor suggest or recommend any investment strategy. Real Vision Group and its Affiliated Parties disclaim all liability for any loss that may arise (whether direct, indirect, consequential, incidental, punitive or otherwise) from any use of the information in RV RELEASES. Real Vision Group and its Affiliated Parties do not have regard to any individual’s, group of individuals’ or entity’s specific investment objectives, financial situation or circumstances. RV Releases do not express any opinion on the future value of any security, currency or other investment instrument. You should seek expert financial and other advice regarding the appropriateness of the material discussed or recommended in RV RELEASES and should note that investment values may fall, you may receive back less than originally invested and past performance is not necessarily reflective of future performance. Well, that was pretty intense! We hope you got all of that – now stop reading the small print and go and enjoy Real Vision.

Be the first to comment

Leave a Reply

Your email address will not be published.


*