The Fear Index and Geopolitical TensionsIn an era marked by geopolitical tensions and economic volatility, the fear index emerges as a crucial tool for traders seeking to navigate turbulent markets. This article delves into the historical significance of the fear index, exploring pivotal moments like the Cuban Missile Crisis, the 1973 Oil Crisis, and the 2008 Financial Crisis. By understanding how investor psychology and market sentiment intertwine with the fear index, traders can gain a competitive edge.
In today's world, marked by unprecedented geopolitical tensions, understanding the fear index has never been more crucial. As global conflicts escalate, the fear index provides essential insights into market sentiment and helps risk managers navigate through these turbulent times.
A Geopolitical Powder Keg
We are witnessing a convergence of significant geopolitical events:
Russo-Ukrainian Conflict: Ongoing hostilities have far-reaching implications for global stability.
Middle Eastern Volatility: Potential for a full-scale war involving major powers like Israel, the U.S., and Iran.
Sino-Taiwanese Tensions: Threats of a Chinese invasion of Taiwan with severe repercussions for the semiconductor industry and global economy.
Pro-Palestinian Protests: These could escalate into widespread violence, further destabilizing the political and economic landscape.
The Role of the Fear Index
The fear index, often measured by market volatility, acts as a barometer of investor sentiment in the face of these geopolitical risks. By closely monitoring the fear index, risk managers can gain early warnings of market disruptions and develop strategies to mitigate potential crises.
Historical Context
Historical precedents show how the fear index responds to geopolitical tensions:
Cuban Missile Crisis (1962): Stock markets plummeted due to heightened anxiety, underscoring the impact of geopolitical events on market sentiment.
1973 Oil Crisis: The Arab-Israeli War and subsequent oil embargo led to global economic downturns, reflecting the fear index's potential spike during such crises.
9/11 Attacks: The fear index surged as markets reacted to the unprecedented nature of the terrorist attacks.
2008 Financial Crisis: Global financial instability caused a dramatic increase in the fear index, providing early warnings of the impending market collapse.
COVID-19 Pandemic: The pandemic's economic halt saw the fear index spike, signaling early disruptions.
Methodologies for Calculation
Understanding how the fear index is calculated enhances its utility:
Volatility Indexes (e.g., VIX): Measure implied market volatility.
Sentiment Analysis: Assess sentiment through news and social media.
Investor Behavior Metrics: Analyze options trading and margin debt levels.
Combining these approaches offers a comprehensive view of market fear in response to geopolitical tensions.
The Psychological Impact
Investor behavior during geopolitical crises is influenced by:
Loss Aversion: Heightened sensitivity to potential losses.
Herd Mentality: Following the crowd amplifies reactions.
Availability Heuristic: Overestimating the probability of easily recalled events.
Strategic Applications
Risk managers must adopt a holistic approach, integrating the fear index with geopolitical and economic data to develop robust contingency plans. While the fear index can't predict crises' exact timing or magnitude, it provides valuable early warnings to prepare for potential disruptions.
Conclusion
The fear index is indispensable for navigating today's geopolitically charged environment. By monitoring market sentiment and identifying emerging trends, you can protect your investments from unforeseen events and build resilience. Embrace the insights offered by the fear index to stay ahead in these volatile times.
GEO
$BRN1! -Are you Ready for Winter's Storms ahead ?!- The most recent conflict on the Middle East between Israel and Palestine(Hamas)
has caused TVC:GOLD and Brent Crude Oil (futures) ICEEUR:BRN1! price to jump 4% .
This increase risk on Geo-Political spectrum is messing up with our Short in ICEEUR:BRN1! .
Short Call idea was shared on bingX copy-trade community where 2.000 people saw the Short trade opportunity.
Congratulations to those who took action.
(Calm before Winter's Storm Idea;
Russia & Saudi Arabia two of the largest World's Oil Producers steady keeping production cuts)
We have already partially taken profits off our trade before conflicts occurrence,
leaving the position opened by aiming at full TP profits at Golden Zone
(which may not be reached now due to the conflict)
*** NOTE
This is not Financial Advice !
Please do your own research with your own diligence and
consult your own Financial Advisor
before partaking on any trading activity
with your hard earned money based solely on this Idea.
Ideas being released are published for my own trading speculation and
journaling needed to be clear on different asset classes price action.
GEO - Scion Asset Mgmt. = Smart money?NOT FINANCIAL ADVICE!!!!
As shown in This SEC 13-F filing, Scion Asset Mgmt. (Burry) currently has one mentionable LONG and its this ticker with an assumed cost basis of $6.60 and 501,360 shares... I am betting these shares were NOT purchased on the open market and were instead acquired via assignment meaning credits from selling PUTS were likely involved (for tactical reason to fight slippage as explained below), unfortunately making it impossible to calculate a factual cost basis from this filing alone.
Selling DEEP "ITM" PUTS(covered by cash) expiring today leaves a cost basis (if assigned) of $8.20 and if assigned, the ability to sell next weeks $9 strike for a profit on both sides. Profit in this scenario would be from credits collected at sale of calls and proceeds if called at $9 before expiration.
The other way to also be long GEO at current market prices, and perhaps with a lower cost basis, would be to just buy shares. If you are buying shares in multiples of 1000 maybe the order book isnt liquid enough and you need a contracted price to enter without the potential for slippage? Well look no further than selling the deepest "ITM" puts expiring TODAY....
While selling "ITM" puts expecting a non-assignment is a game of long odds and not advisable, you also have the chance this way of keeping credits and not being assigned, which eliminates your ability to capitalize on the future upside for the unassigned shares, however you also didnt technically expose yourself to the share market and still profited.
I personally dont like following others trades blindly, so I analyzed and found some technical confluence and subsequent conviction through the monthly volume profile points of obvious interest and fib retracement levels calculated from the last 5 year depreciation.
The Michael Burry GEO tradeJust analyzing this purely technically because I like MB and as of now supposedly this is his only long holding. Now, keep in mind this is not a stock for everyone - "The GEO Group, Inc. is a publicly traded C corporation that invests in private prisons and mental health facilities in North America, Australia, South Africa, and the United Kingdom."
So yeah, a lot of people including myself will have problems giving money to this, but when we analyze it purely technically, I can see why MB is very bullish on this for the long term.
First of all, we've broken an enormous MONTHLY downtrend (right side chart is a monthly chart) and we're basing with bullish divergence on the daily chart (left side) - that's usually a good thing to be looking for when trying to ID possible bottoms. Buyers may not all be there, but sellers are starting to dry up. Could it go lower? Absolutely. Then there's the Monthly RSI on the right side chart - enormous bullish divergence within this basing. On the left chart we can see it is retesting a previous resistance area (7.25-7.50) which should now be strong support.
So, I can see why this is very interesting to Mr. Burry. I don't recommend anything, but I thought it was a good example of what these gurus see before things blow up.
GEO marks up to higher levelsNYSE:GEO looks like in a trending up period.
The price completed a consolidation phase (stage-1) between May 2021 - Nov 2022.
From a moving average point of view, 10-week (simple) moving average (MA) is supporting the price and just recently touched the price again after its first touch in Nov 2022.
Moreover, MA100 crossed over MA30 recently with a bullish mark up. And the price is also testing MA200. So, this can be the beginning of the stage-2 (mark up).
I expect the price will try to hold above MA10 with higher highs.
GEO GROUP Is Michael Burry right to bet big on this stock?Dr Michael Burry, famous for predicting the 2008 Housing Crisis and shorting the market, is the majority holder on the Geor Group Inc (GEO). The price broke a week ago above the 1W MA200 (orange trend-line) for the first time in more than 3 years (since June 2019) and that alone constitutes major news.
A quick application of Dr Jean-Paul Rodrigue "Phases of a Bubble" model, strengthens even more buying GEO at this stage as it appears that the price has gone through the (final) Despair Phase and is now well above the Mean to start a new Bull Cycle.
Is he right yet again?
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GEO: Michael Burry bought more GEO
Michael Burry has bought more shares of this REIT so I thought I'd give a look at the chart for those who want to follow him.
What the chart is saying:
Big downtrend since May 2017. In May 2021, the stock has started a consolidation/base in form of a range between 5.5 and 9.54.
This range could be a bottom formation.
Note that bottoming pattern takes time and this one could continue for a few more weeks/months. However a break out of the range (9.54) could confirm a change of trend and a long trade/investment.
Keep monitoring this stock in the next few days/weeks, set an alert at the top of the range. If it breaks out of the range, the first potential targets are 11, 13.90 and 17.
I remain neutral for now. On watch.
Michael Burry buying GEO - Chart reviewToday you can review the technical analysis idea on a 1D linear scale chart for Geo Group Inc (GEO).
Michael Burry's investment in Geo Group Inc seems to be paying off. Price may be headed towards $11. Keeping a close eye on this one. Falling channel breakout and above the 200 SMA. Resistance around $11.
fortune.com
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Disclosure: This is just my opinion and not any type of financial advice. I enjoy charting and discussing technical analysis. Don't trade based on my advice. Do your own research! #millionaireeconomics
Long GEO Group niche REIT - cool ticker, book valueThe cliche about prison life is that I am actually integrated into it, ruined by it,
when my accommodation to it is so overwhelming that I can no longer stand or even imagine freedom, life outside prison, so that my release brings about a total psychic breakdown, or at least gives rise to a longing for the lost safety of prison life.
The actual dialectic of prison life, however, is somewhat more refined. Prison in effect destroys me, attains a total hold over me, precisely when I do not fully consent to the fact that I am in prison but maintain a kind of inner distance towards it,
stick to the illusion that "real life is elsewhere" and indulge all the time in daydreaming about life outside, about nice things that are waiting for me after my release or escape.
I thereby get caught in the vicious cycle of fantasy, so that when, eventually, I am released, the grotesque discord between fantasy and reality breaks me down.
The only true solution is therefore fully to accept the rules of prison life and then,
within the universe governed by these rules, to work out a way to beat them.
In short, inner distance and daydreaming about Life Elsewhere in effect enchain me to prison, whereas full acceptance of the fact that I am really there, bound by prison rules, opens up a space for true hope.
if there ever was such a thing as no-brainer easy money
this is it.
Republican sweep up in the November Primary is what the market will begin to front-run this summer
targets are potentially conservative.
Real Estate and Construction costs are already massively inflated, the market has not yet revalued the enterprises like GEO Group
short squeeze can happen here if the retail cohort swarms it
GEOThe crash from ATH's looks about finished, HTF ABC bullish correction. I would think we now impulse 5 up. If that turns into an A wave then there is much more pain. If we do 3 up here and only hit $10 then this would be an X wave and the price action did a fib extension 1 to 1 and would expect much more downside.
Short Squeeze will be likely in the next 3 weeks.Market Cap: 939 M
Shares Outstanding: 122.5 M
Average Trading Volume (10 days): 1.9 M
Shares Short: 27.9 M
Short Interest(%): 22.8%
Days to cover: 4
Change in Short Interest: -3%
Ownership Breakdown %:
Institutions: 83.2
General Public: 13.6
Hedge Funds:
Individual insiders: 3.2
Sum: 100
Option profile:
Total OI:
Put Call Ratio:0.64
Put OI:
Call OI:
Highest Put:6
Highest Call:8
Max Pain: 7
Open Int (30-Day): 150 K