Daily Reading

Daily Reading 

“October: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” Mark Twain

Is October particularly treacherous? Not really.  In October: Into the Wild, Joshua Brown shows that October is a wild, highly volatile months. Besides being a good month for crashes, it is often a bear-killer. And as Joshua notes, “For shorter-term traders, October should offer some phenomenal opportunities to trade the vol they’ve been denied for so long. “

Speaking of volatility, John Rubino suggest buying it, if you’re a trader and want some action. In Time to Buy Volatility, Again, he notes he likes VXX as a simple way to play a spike in volatility. 

King World News interviews James Grant.  James laments that the Fed ignores the old saying “silence is golden” and notes that the Fed members can’t stop talking–to the detriment of investors, the Fed’s credibility and to our paper and faith-based monetary system. 

John Hussman argues that the stock market is not only overpriced but at the richest 1% levels seen since the late-1990’s market bubble. That makes those of us invested in equities “Sitting Ducks.”

Bill Boner at Acting Man asks investors if they’re feeling lucky: “Gamblers do not walk away from 100%-a-year gains. They stay at the table… and go right to the end… from the blow-off to the blow-up.” Are you ready?

Also at Acting Man discusses Italy’s mounting woes in Italy Comes Back into Focus. The situation is currently relatively tranquil but it might not take much to become quite unpleasant.

For more on Italy, Mish Shedlock writes about the upcoming vote in Berlusconi Faces Party Revolt; Collapse of Italian Government Hangs in Balance; Rush For Votes is On.

Lee Adler makes the case that the housing bubble is not ready to pop in More Housing Data Says Bubble Will Rage On, Fed Will Never Learn. ZIRP (Zero Interest Rate Policy) is constraining supply because the low interest rates decrease selling incentive. According to Lee, “The first signs that the price rise is coming to an end will be a drop in sales volume or a material increase in supply, or both.”


 (Chart by Lee Adler)


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