31 replies to this topic

[OEXCHAOS]

Scott, I've studied the VXO and now the VIX for some time too. I've found that they correlate pretty well, though if you want to go back historically, you have to stick with the VXO. There are a lot of ways to look at it short term. E.g. I run a MACD on a 30' to get early warning of trend changes. I used to have a trading model based upon the daily and a set of BB. It tore the cover off the ball for a while then quit. I mostly use it now as a heads up indicator. My favorite permutation is the Relative VIX. This is a measure of the deviation of the VIX from it's 200-day SMA. Now, I can theorize as to why this indicator works as a bottom spotter, but the bottom line is, it's VERY good and has been for a long, long time. How do I use it? When I see an "excessive" reading, I go on alert. I look for confirmation from sentiment measures. If I have them, then I have a "go" for a Buy as soon as I get price and/or breadth confirmation. During the positive part of the seasonal cycle, I'm quicker to buy, and during the negative part, I'm slower to buy. BUT, when you get the relative VIX up there, it's really just a matter of picking your spot to get long. It doesn't mean that we won't test or even go lower, but you're going to get a rally (as we have been). Take a peek at the last chart (BTW, there was an error. The Relative VIX is lower than at the June 06 lows, though not by a lot).

[mss]

It appears that my original forcast made on Aug 7, start of this thread, is holding up. We are still trending down
with lots of bounces, which may come to a screaming halt very soon and just be down.

The other forcast made stated that if the Green line was broken to the down side, we could/would be in a very dangerous position, price wise. Chart below.

http://stockcharts.com/c-sc/sc?s=$SPX&p=D&yr=0&mn=7&dy=0&i=p86046995174&a=116044349&r=1404.png

All of my charts in this thread update except one. Stay tuned, time is running out for a IT "bullish" outcome.
Comments, rebuttles, suggestions, etc. are welcome.
mss

[SilentOne]

hi mss,

I bought SSO yesterday and some SPY Nov 148 calls. I suspect it will be a good entry, but we'll see.

Meanwhile I watch this chart of yours. It would not surprise me if this chart confirms a bottom next week.

http://stockcharts.com/c-sc/sc?s=$SPX&p=D&yr=0&mn=6&dy=0&i=p77850608334&a=113511538&r=1010.png

cheers,

john

Edited by SilentOne, 11 September 2007 - 10:09 AM.

[mss]

john, here is a slightly different way to look at the same VXO.
Until the GREEN dotted line is crossed to the upside, we are in a "bouncing-forming" bottom. Then it has to cross the RED HRZ. to really confirm the bottom is in. I know I am swimmig aganist the tide here, but It's my tide , time will tell.

http://stockcharts.com/c-sc/sc?s=$ONE:$VXO&p=D&yr=1&mn=6&dy=0&i=p21852127490&a=116425798&r=9493.png

I agree, we should know something within the next week or so.

Best to you,
mss

[iloli way]

mss, thanks for the chart. Real hurdle is 1504 and stays up there with no plug pulled. Until then still Looking good swimming there in your tide.

[SilentOne]

Took profits on SSO and SPY calls. I'll look for reentry. cheers, john

[SilentOne]

hi mss,

All of my charts in this thread update except one. Stay tuned, time is running out for a IT "bullish" outcome.

Those words may prove prophetic.

The $VXO is gearing for a move. Which way though? A test of the 50 dma for the $VXO (on daily chart not shown) is coming but what then? Things seem to be heading for another pivot around FED day.

http://stockcharts.com/c-sc/sc?s=$ONE:$VXO&p=D&yr=1&mn=6&dy=0&i=p21852127490&a=116425798&r=9493.png

Let's say the $SPX can take 1520 next week. Then the $VXO will need to drop substantially from here to get these charts of yours into a bullish mode. Otherwise it could be a lot of sideways meander (or worse) until later in October.

http://stockcharts.com/c-sc/sc?s=$SPX&p=D&yr=0&mn=6&dy=0&i=p77850608334&a=113511538&r=1010.png

cheers,

john

Edited by SilentOne, 13 September 2007 - 02:37 PM.

[Jnavin]

Why is the September volume thus far as low as the late August volume? I would expect late August volume levels to be relatively low, but why are we seeing such low levels in the post-Labor Day environment? It's unusual, to say the least.

Edited by Jnavin, 13 September 2007 - 06:15 PM.

[SilentOne]

So, whose stepping in here with positions in front of the FED tomorrow? I think I'll pass.

http://stockcharts.com/c-sc/sc?s=$ONE:$VXO&p=D&yr=1&mn=6&dy=0&i=p21852127490&a=116425798&r=9493.png

cheers,

john

[mss]

We going to know soon.

http://stockcharts.com/c-sc/sc?s=$SPX&p=D&yr=0&mn=3&dy=0&i=p61289556629&a=116507500&r=5546.png