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Registered User
Joined: 12/7/2004
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The VIX fell thru it's 20,50,+200 DMA. Today it fell thru 20 for the first time since Dec'07. Very Mkt bullish.
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Joined: 4/18/2005
Posts: 4,090
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Registered User
Joined: 9/25/2007
Posts: 1,506
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On Wednesday ... the VIX fell down through the trendline that has held it for over a year ...
Oddly enough ... the QQV is just now back to it's supporting trendline ...
Which has me wondering if that is a doji star that we witnessed on the NASDAQ today ...
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Joined: 4/18/2005
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I never fully learned to use the VIX. I have a basic vague understanding of it. I know it's a volitility index.. plotting it as a comparison against the Sp-500 it looks like when it goes down the market generaly goes up.. and based on statements above this seems to confirm that.
A quick refresher in using and reading he VIX--X (if that is the correct chart) would be great.
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Registered User
Joined: 9/25/2007
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Scott ...
I'm a long way from being the brightest bulb in the pack ... and possibly others could offer a better explanation ...
I'm sure that you're familiar with the Put/Call Ratio ... well ... the VIX is similar ... except that it takes into account the "prices/paid" ... i.e. the premiums paid ... for Puts vs Calls ...
I think of it as a "Greed / Fear Index" ...
After noticing the trendline under the VIX several months ago ... I asked the question on this forum if technical analysis of a volitility index was viable ... as what we seek through technical analysis (IMHO) is a "read" of the underlying psychology acting on a particular security and/or market ...
But ... you will notice through historical studies that a level around 20 tends to act as the floor for the VIX during Bear markets ... while plunges from the 20 level down toward the 10 level tend to characterize bull markets ...
Your mileage may vary ...
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Registered User
Joined: 12/13/2004
Posts: 4
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VIX - "When it's high you, buy. When it's low, you go!"
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Registered User
Joined: 12/7/2004
Posts: 393
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IMO VIX below 20 = improving bullish mkt sentiment associated with what Realitycheck just explained. If it continues lower we may see the mkt approach the Dec '07 highs.
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Joined: 4/18/2005
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so if my best trading was in 05' and 06' then that says that I do better in low volitility enviroments ?
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Registered User
Joined: 12/7/2004
Posts: 393
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Scott, Very good traders may do better with higher (over 20) volitility, but most investors do better with lower volitility. IMO
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Registered User
Joined: 9/25/2007
Posts: 1,506
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QUOTE (scottnlena) so if my best trading was in 05' and 06' then that says that I do better in low volitility enviroments ?
Exactly ....
Scott ...
Trend following is important ... but to me ... everything must pass the "Does it make sense?" test ...
Let me tell you a story ....
A businessman was aboard a Boeing 747 which departed LAX bound for JFK when he looked out the left window and saw the #1 engine flame out ...
A few minutes later ... the pilot calmly came over the intercom and said ... "Ladies and Gentlemen ... you may have noticed out your left window that we have lost our #1 engine ... but not to worry ... the 747 is the safest aircraft that has ever been constructed ... it can fly to New York perfectly well on 3 engines ... it just means that we'll be arriving 30 minutes behind schedule" ...
The businessman was a bit perturbed at this as he was scheduled for a meeting shortly after his scheduled arrival and had little room to spare ....
A few minutes later ... he was looking out of his right window ... and saw the #4 engine flame out ... and ... without fail ... here comes the pilot over the intercom ... "Ladies and Gentlemen ... you may have noticed out your right window that we have lost our #4 engine ... but not to worry ... the 747 is the safest aircraft that has ever been constructed ... it can fly to New York perfectly well on 2 engines ... it just means that we'll be arriving 90 minutes behind schedule"
And the businessman became even more perturbed ...
A little while later ... again looking out of the left window ... the man sees the #2 engine flame out ... and again ... the pilot comes over the intercom ... "Ladies and Gentlemen ... you may have noticed out your left window that we have lost our #2 engine ... but not to worry ... the 747 is the safest aircraft that has ever been constructed ... it can fly to New York perfectly well on 1 engine ... it just means that we'll be arriving 2 and half hours behind schedule"
At this point ... the businessman was livid ....
So ... as he watched cautiously out of the right window ... he saw the #3 engine flame out ... and all of a sudden he jumped up and shouted ... "JESUS H CHRIST !!! I GUESS WE'LL BE UP HERE ALL DAMNED DAY NOW !!! "
Take a look at the XOIL ....
Take a look at the DJ-20 ...
Take a look at the TRAN-X ...
Does it make sense ?
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Registered User
Joined: 12/7/2004
Posts: 393
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RC, The railroads are leading the DJ-20 making all time new highs mostly from hauling alot of coal, now and even more in the future. They're all passing the cost of higher diesel fuel on to their customers.
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Registered User
Joined: 9/25/2007
Posts: 1,506
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QUOTE (laphill) They're all passing the cost of higher diesel fuel on to their customers.
Exactly ....
And that equals ......
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Registered User
Joined: 12/7/2004
Posts: 393
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The question isn't if inflation exists but rather how much and how high will it climb before it negatively effects the broader stock market.
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Registered User
Joined: 4/18/2005
Posts: 4,090
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"So ... as he watched cautiously out of the right window ... he saw the #3 engine flame out ... and all of a sudden he jumped up and shouted ... "JESUS H CHRIST !!! I GUESS WE'LL BE UP HERE ALL DAMNED DAY NOW !!! "
Take a look at the XOIL ....
Take a look at the DJ-20 ...
Take a look at the TRAN-X ...
Does it make sense ?
 "
pretty funny.. had my wife rolling.
I looked at these and i'm not shure what conclusin I was supposed to be drawing. I saw oil going up.. no real signs of a top..and the other two bottoming... or looking like a head and shoulders bottom. BUT the DJ - 20 Also looks like a rising wedge. Stupid charts.......Which is which? of course either pattern could fail, or it could swing down to retest some area of the bottom pattern then move up .. or then fail.. or move sidewasye from here.
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Registered User
Joined: 12/7/2004
Posts: 393
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First VIX close below 20 since Dec '07. Which begs the question; does the VIX lead the mkt (SP-500), or vice versa ?
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Registered User
Joined: 9/25/2007
Posts: 1,506
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QUOTE (scottnlena) Stupid charts.......Which is which?
What do you suppose the largest single expenditure is of the transports ?
Headlines ... after the bell ... "FedEx Cuts Profit Outlook, Citing Higher Fuel Costs"
Does it make sense ?
Are we REALLY gonna be up here ALL day now that ALL four engines have quit ?
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