Hello Reader,

Thanks for the feedback you’ve sent in on the video. I appreciate it—I get an average of around 20 emails every day from readers of The Daily Dirtnap (occasionally fewer, often lots more), and they really help my thought process.

Anyway, the death of trend following is part of a bigger regime change. The market no longer looks how it did for the last five years or so.

Back on Short Vol

I talked a lot about the huge short volatility problem back when XIV blew up. And I’ve been warning about it for a lot longer than that.

If you remember, I said that the correction in early February was just the beginning.

That’s actually a pretty lonely place to be right now. The media isn’t really talking about it anymore; nor are people. Here’s the interest in the search term “short vol,” per Google:

It’s like it never happened.

I can’t emphasize this to you enough—the short vol unwind is not over. It is far from over. We are in the eye of the hurricane, that is all.

I actually think that one of the reasons people aren’t talking about it is because they don’t understand it. Because if you understood it... you’d know it’s not over.

I’m getting on my soapbox about this in a kind of mini-documentary, which I’ll send out to you tomorrow.

It probably won’t make your Monday any brighter, but it might just help save your portfolio!

After all, I’ve been right about short vol for almost a year now. And I have very high conviction that I’m still right.

So turn on, tune in.

Until then,

Jared Dillian