The economy itself is slowing down. Markets remain supported by quantitative easing. Is complacency acceptable after what we saw throughout 2018 as well as in the Financial Crisis?
All throughout 2017, there was a foolproof strategy. Buy anything and everything and you will see profit. No problem. Too easy. Then 2018 came and the VIX trade everyone was doing suddenly broke. That was a huge wake-up call, well for about 15 minutes. Complacency came back and then we saw another huge shock in October. But complacency made another return in late December as traders piled into FANG stocks and other equities that were oversold. With consistent and never ending statistics documenting the current slowdown, every single entity has suggested a recession will not happen. Strange, isn’t it?
Complacency – NorthmanTrader