The bear market is showing signs of waking up and, for one, it means the days of setting up your trading desk to short volatility and then going to play golf are over. That was the topic of a new report released by Bloombergthis morning, who made note of a couple of signs that indicate that the bull market's best days could be behind it.
It also noted that this year, the average down day for the market has been 24 percent bigger than the average green day, the biggest delta since 1948.With the market casually shedding 400 points yesterday on the unrest in Italy, it was confirmed that 2018‘s market is very different than 2017‘s market. 2017 was the market of "the Target manager making money by shorting volatility" and 2018 is the market of "not knowing which day volatility could creep out of nowhere and slash the market lower by more than 2% in a single session".
As Bloomberg notes, among the confusion, this has caused a sentiment at trading desks around the world. Yesterday's down day would have been a major aberation last year. But this year, it's become the norm: