Volatility is back with a vengeance and it is making for some exciting trading. Market players badly anticipated the hot CPI numbers and were slammed when the numbers were released but hungry traders jumped on the big day and now have totally recovered the losses.
While dip buying is nothing new, it was a shift to sell off on the bad news in the first place. The market has typically had little negative reaction to any sort of negative news but the blow up of the short volatility trades has changed that.
It is a very different market environment now which can be very rewarding depending on your style. If you are a momentum trader that focuses on position trades this is probably frustrating but if you have a shorter term time frame it is the sort of movement we haven't see in ages.
This morning I'm adding to the gold trade I discussed yesterday. Gold (GLD) initially sold off but it reversed quickly when market players seem to now recall that it is the go-to play when there are inflation worries.
I tried to catch a number of other things off the early lows with limited success but I'm seeing some very good action in names like Alibaba (BABA) , Sorrento Therapeutics (SRNE) , HTG Molecular (HTGM) and Sangamo (SGMO) .
I was recently asked about my ETF of the Year, ETFMG Alternative Harvest ETF (MJ) . The symbol changed to MJ from MJX and there were some concerns about the custodian of the assets having a problem with the cannabis sector. The ETF is trading right at Net Asset Value so I don't think that is a big concern. Also I noticed they changed their disclaimer which I think may be the way the issue is addressed. I am a buyer of MJ and will be adding further.