<p>While I haven’t done the research on this point, I would suspect that backwardation is most likely to occur when the vix high. In that case, holding svxy can still be profitable if there is a substantial decline in the vix (and with it, the vix futures,)</p>
<p>The real danger with the inverse product is that when the vix spikes, it often REALLY spikes, swamping the contango effect.</p>
<p>Yeah…your first paragraph EMM1 is the flip side of this…</p>
<p>“I want to see what happens when volatility rises and there is still a contango…”</p>
<p>[Tepper</a> Believes Stocks Could Run Up 20% This Year](<a href=“http://www.cnbc.com/id/100549879]Tepper”>Tepper Believes Stocks Could Run Up 20% This Year)</p>
<p>Only 20%? It already ran about 10%. I was wondering just this morning how high it can go in a year.</p>
<p>You think its going to go straight up to 20% without a correction?</p>
<p>No. I expect a correction at some point. Still, it’s only March. Unless the correction is severe, it will be slow from now on if they expect 20% run up.</p>
<p>Personally I’d be astonished if the market is up 20% at year end.</p>
<p>If so, it’s time to sell, isn’t it?</p>
<p>I don’t know, but its conceivable that at any moment a 10% correction starts which is not usually a big deal and then the market will have to go up 20% from that time to meet Tepper’s call. Most people aren’t great market timers including me so unless things look like they’re going to get a lot worse - for instance a recession, it usually isn’t a good idea to sell everything. Maybe lighten up a little or be more cautious, I don’t know. Its something I’m struggling with right now also.</p>
<p>I could never sell everything, too much of a chicken. I may double cash holdings. That’s about it.</p>
<p>I’ve done the sell everything thing many times. Sometimes you just want out.</p>
<p>I don’t think “all in or all out” in equities is something I will do.</p>
<p>"I’ve done the sell everything thing many times. Sometimes you just want out. "</p>
<p>We’re not all great market timers both getting in and out of positions. Unless you handily beat the averages year after year, doing this is not a wise thing to do particularly now that many economic indicators are improving.</p>
<p>It’s not necessarily a timing thing. There may be breach of a support level or a pattern breakdown or a crash through support or a pattern with a moderately better than even chance of resolving to the downside. And that may be the signal to get out before the crash.</p>
<p>If it doesn’t, hey, you can always just buy back your position.</p>
<p>You sold all and bought back a couple of times last year?</p>
<p>I am trading svxy options in a small way. Sometimes the best way to learn is by doing.</p>
<p>[Bear</a> Market to Take Hold in 2013: Expert](<a href=“http://www.cnbc.com/id/100552025]Bear”>Bear Market to Take Hold in 2013: Expert). Somehow these folks who look back over 100 years identifying cycles don’t think that new world economic realities matter.</p>
<p>dstark, please keep us abreast of what you learn.</p>
<p>My RE friend in NYC just passed on an offer on a condo to the seller - he’s having a crazy year and it’s only March. Said that he should just take the rest of the year off. I have the feeling that he’s going to have a very busy year. Especially if the first time claims number keeps heading in the right direction.</p>
<p>BCEagle91, ask your friend where re prices are compared to several years ago.</p>
<p>EMM1, the options are not active. I think if you put an option position on you are stuck with it and it isn’t easy to put a position on. I am on an iPhone and I am missing info. If xiv and svxy are correlated</p>