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When the globex markets opened on Sunday afternoon, I was shocked. At the time, I had just returned my rental car at Dulles, and as I fired up my TOS app and saw the ES up about 24 points, I just about toppled over backwards.

What was shocking, of course, was that the “baseline” event – – – the high-likelihood outcome that everyone expected – – had happened, and yet it was created an explosive up-move in equities (and trashing gold). As I lamented in the wee hours of Monday morning, when I was miserably working my way out of SFO back toward home, a bullish pennant was complete.

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In retrospect, there was one grand error I made, which was amping up my short exposure on Friday. In other words, the dozens of regular short positions I had in place, I don’t regret having. Some got stopped out, most did not, and I’m happy with what’s left. However, for reasons I can’t quite fathom, I decided to get cute and get heavily short a mishmash of ETFs, all of which were instantly stopped out at a loss the moment the market opened on Monday. My losses were twice as big as they should have been for the day.

In the midst of all this, of course, volatility absolutely cratered. In the span of a week, we’ve gone from a VIX deep in the mid-teens to one almost threatening single digits.

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A longer-term perspective shows what a steep slope volatility has been on for years now. It wasn’t but fifteen months ago  that we had a VIX in the mid-30s (can you even believe that?) It took the past three months for the VIX to crawl somewhat higher, trying to make its way back to the trendline, but with just a single (non-U.S.) election, it’s all been blown to hell.

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The NASDAQ in particular has been on a tear, with lifetime highs across the board. Google (a company my friend Andy B. funded with a $100,000 loan) passed the $600 billion valuation mark today, and the NQ itself is still rocking it at this hour.

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As for gold, it did a decent job fighting back the selling, and I wouldn’t dismiss the possibility of it defeating that blue downtrend. The area I’ve tinted is a decent cup with handle pattern, as long as prices hold above this green zone.

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All in all, a pretty sucky day for ol’ Tim, but we’ll see how long this French fiasco persists.

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