I posted this over at GXY (my biggest holding then SYA) figures...

I posted this over at GXY (my biggest holding then SYA) figures I would share..

So U.S. equities (and therefore the ASX and are beloved GXY/SYA) have been mangled in the past few days.

VIX equity vol has gone through the roof (seriously look a chart) thanks largely to short covering with respect to XIV and other short vol ETFs (these are where punters are able to short equity volatility - a very profitable strategy over past five years - eeeeeeee until now). this has lead to what look likes the unraveling 'i.e. a termination event' of these ETFs and possibly others.. This has huge impacts to the physcial equity vol and S&P, DJU cash markets...

There's plenty of chatter by the doom squad out there that this could potentially morph into something far bigger.. Much like how sub-prime defaults in 2007/08 morphed into a once in a lifetime Global Financial Crisis.

THAT WONT HAPPEN THIS TIME - I believe this will remain a somewhat isolated and contained equity event -I REPEAT - This will not turn into GFC 2.0 - and we should all be making the most of these opportunities to buy more GXY (and select others SYA) in my opinion only - heres why:

1.) Most sophisticated and professional investors (theres plenty on record saying this) were perplexed with why U.S. equity indices rallied the last 10% over Dec/Jan - this clean out over the past few days has simply removed some of this irrational exuberance...

2.) Compared to 2007/08 there is far less participation in this equity boom from the middle class (less retail holders to exacerbate these moves and cause the second/third waves of panic)

3.) The sell off actually was triggered by a 'Good' news story with respect to US economic strength, Higher interest rates and Monetary policy normalisation - something that central banks have been looking for years to do

This 3rd one is important - global financial markets can undo all of this fear by simply pricing in only two hikes by the US Fed in 2018 rather than the three that are currently expected (this removes what started the sell off...) If the fear continues U.S. treasuries will continue to rally (lower in yield) - I mean look we have already seen 2yr and 10 yr treasuries rally from 2.20% to 2.00% and 2.85% back to 2.69% in one trading session (huge moves for those who don't follow treasury markets)

In lithium terms - we all know that these supply fears are unfounded and this is DSO allover again - we know there is huge growth round the corner for GXY (and others) so take this sell down as an opportunity to increase your slice of the pie!

All in my opinion only - Good Luck!