It's obvious when you think about it, but lots of investors struggle to come to grips with this fact: The stock market is like a living creature whose personality mimics the psychology of the investors who give it life.
If investors are calm and optimistic, the market naturally reflects that positivity.
But when investors are unsure about the immediate future - like they are right now - and have to juggle competing and complementary apprehensions about... politics... interest rates... economic growth... and whether the mega-cap tech stocks they believed were the Holy Grail are about to be subject to all kinds of new regulations... their nervousness manifests itself as volatility, mirroring their fears.
That's where the market is now - where it's been since February, in fact.
Goodbye, Steady Eddie - hello, Nervous Nellie.
When that happens, the market does what it always does: It takes the path of least resistance.
Where's that path heading now?
I'll show you. Buckle up...
About the Author
Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.
The work he did laid the foundation for what would later become the VIX - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.
Shah founded a second hedge fund in 1999, which he ran until 2003.
Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.
Today, as editor of Hyperdrive Portfolio, Shah presents his legion of subscribers with massive profit opportunities that result from paradigm shifts in the way we work, play, and live.
Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on Fox Business's Varney & Co.