23 replies to this topic

[zigzag]

OGM. I agree with you here but. The very idea of SP moving up to 1000-1060 now is %@#$&^^! outrageously perverted.

[relax]

OGM what's your take on the VIX today - what does the fact that it is down represent

[danzman]

Great setup.

Rising wedge on SPX daily. Market had massive corrective rally.

Complacency abounds.

With all due respect, Dont you think 1000 is on table for spx until 1/16/09 opex day then the correction back to levels of 50 day moving avg . That would be a massive corrective rally . Thoughts!!

Since you mentioned op ex, I'll respond. The work I've done shows that 74% of the time, if the
S&P 500 close on the Tuesday before op ex is > the close of the previous Wednesday AND
my COT work is bearish (as it is now). Shorting from Wednesday's open and covering on the
Wednesday open of op ex week makes lots of $$$$. The proft factor is a high 6.2 because the
winners are a lot bigger than the few losers. While nothing is ever 100%, this is one of those
plays that you just can't fade.

D

[linrom1]

OGM

what's your take on the VIX today - what does the fact that it is down represent

Think about it this way: why does market go up 100% with VIX in tight trading range of 5-10? Isn't it because perceived market risk can be more accurately assessed(hence hedged), as no one will pay much premium on calls and puts that are far away from the near strike price!

If market was anticipating an up move of 50-60% within next few months, VIX would spike just as high as during the recent swift downward direction. We have no prior experience of looking at VIX behavior in secular bear markets; but, theory would also support 5-10 trading range and market losing 50% over next several years.

Edited by linrom1, 09 January 2009 - 02:51 PM.