It’s been a busy and productive week here in the neighbourhood: I learned a new acronym and two new words. That’s what comes of cavalierly downloading and opening an investment report. And yes, the (lack of) punctuation is correct (well, faithful to the original): What follows is not a sentence because it is not a complete thought. Completely obscure, perhaps, but not complete.
VIX remains in backwardation
and a return to sustained contango
is required to confirm a new bull market
I admit my first thought was not phrased with sophistication.
Tarnation! What the heck is backwardation?
Introducing Sustained Contango:
The new dance-marathon version
of this perennial fan favourite.
My third was to wonder what number could possibly be expressed as VIX: It seems to break the rules I learned back in the XIVth century for forming Roman numerals.
Is it New Math?
Google to the rescue.
Backwardation: The future price for something is lower than the current price.
Contango: The future price for something is higher than the current price.
Now, you might call this “prices dropping” and “prices rising,” respectively, but you can’t charge management fees for that sort of language.
And VIX? That, my friends, is the Volatility Index.
And these days my VIX is in sustained contango, figuratively speaking: It’s hitting new highs every day. Great news, eh? I know the Big Guy is pleased.