Trading Like YOLO
YOLO to you.
My smug son informed me YOLO stands for You Only Live Once, after a rapper Yolo MCSwaggin who rode the YOLO phrase to his success and popularity amongst the young.
YOLO is a pervasive trend these days since the world moved onto the era of instant gratification that came with on demand tv and wifi, instant messaging and instant bank rescues and rate cuts.
That is the tune we are all singing to as leaders do not have a second chance with CEO heads rolling off the chopping board and prime ministers get ousted every other month.
So Yellen’s first Humphrey Hawkins comes this Thursday as Draghi prepares to add more stimulus if deflation risks rise. http://www.businessweek.com/news/2014-02-23/draghi-says-ecb-ready-to-act-if-inflation-outlook-deteriorates
It will be YOLO trading all the way, as Facebook punches through new highs because for these Facebooks and Teslas will be given time before the write offs start.
The S&P 500 is headed for yet another new high from the looks of the charts, everything else discounted. As Zerohedge observed it is decorrelating with USDJPY, bond yields, jobless claims and credit spreads amongst others. http://www.zerohedge.com/news/2014-02-22/just-12-wtf-charts
It is the urgency that worries me as behaviours turn to unreasonable as we are about to see Ukrainian debt restructured and forgiven because they overthrew their president http://www.businessinsider.com/ukraine-needs-35-billion-over-2-years-2014-2?IR=T. And urgently will the S&P rally this week because You Only Live Once and Yellen will see to that.
That would be an opportune time to execute the YODO hedge trade because You Only Die Once which is timely because markets have not died in a long, long time.
Do what you have to do, sell S&P futures, interest rate locks, currency options and free up cash. Because YOLO trades will only lead to YODO outcomes.