Easy. The beefers ate it. ;-)
Trillions of $$$ in computer-driven trading funds designed to extract money from moves in stock prices usually are a smoothing force for the common price moves of stocks. If some buyer want stocks & bids them up, the computers move to short it instantly, reducing the price move. Then in millions of small trades, they cover. Ditto on the reverse. Voila, volatility is reduced. Until an event causes a singularity and a large re-pricing move. Then the computers exacerbate volatility.
The tendency of this huge computer trading money machine is to drive volatility down. So forget about trying to divine the "meaning" of low volatility. Computer trading programs have erased the value of many technical indicators, unless very, very extreme.
[whither, hither, thither are archaic correlative adverbs used to indicate "to a place"; similarly, hence, thence and whence indicate "from a place". Languages like Latin (& Russian as I remember a little) have terms & grammar like that to indicate motion. English has ejected these over time. But medieval English had them and writers of novels set in that period use them. I heard a lot of those words listening to "The White Company" by Arthur Conan Doyle and learned how to use them. A Fred Astaire movie in the 1930's had a funny scene with Eric Blore on their usage. So I think I'll try then out from time to time as this is an erudite blog site. ;-) ]
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3 comments:
Bunkerman you are confusing me again. Weren't you the one who was pissin and moanin about the irrational volatility and called it a 'beefer ping pong game'? But now you sayin there is no volatility. Huh?????
I understand the problem, it is confusing. That's why I'm here.
;-)
By the way, there are MANY beefers besides the computer beefer trading funds.
Imagine a herd of cows grazing. On average most of the time they eat the grass & level it out. But once in a while they stampede.
And there are rogue bulls the stomp around and toss the hay into the air. That's what some non-computer beefers do.
And sometimes, the cows & bulls stampede together. When their forces / phases correlate, we get a huge move.
Average volatility is unnaturally low due to computer beefer funds. But occasional individual stock volatility is very high due to non-computer rogue beefers (that's the "ping-pong" game).
One needs to recognize "diversity" in the beefer population ;-)
Lmaoooo Bunkerman. I'm talking about money managers and you seem to be talking about livestock.
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