Republic Risk: Chop, Vol, and Yellow Momentum Ahead of Jackson Hole

Beware the Ides of September

Dear Fellow Investor:

As I look at the market today, a sense of caution is developing. The eight consecutive winning days and the overbought push are significant.

However, the resurgence of Volatility is a clear sign that we need to stay informed and engaged to navigate these uncertain times.

There’s been some chatter that something may have broken two weeks ago during that surge in volatility due to the Bank of Japan’s minor rate policy change.

The S&P 500 Volatility Index surged in a way we haven’t seen in years, and the Nikkei had its worst one-day drop since 1987. So, it is an important question for members to consider and then adjust risk tolerance accordingly.

Just Dario asked if the surprise move in the VIX led to the implosion of a brokerage, and it just hasn’t made the news. This makes sense to ask, as the author does:

“One very peculiar thing about the 1987 crash is that many brokerages went bust. So how is it possible that Japan suffered a stock market crash of a magnitude n…