6 replies to this topic

[ogm]

Since 1990 ..... If you bought the market with VIX hitting 32.... you will always sell it for a profit within several weeks. As in.. the market was always higher several weeks later. Too bad there is no VIX data before 1990 to see if it holds up in other periods.

[rkd80]

Of those times, how many times would you have to experience gut wrenching declines in order to see your position finally become profitable?

[SemiBizz]

Man you just beat that bull drum all the way down here...

[ogm]

Man you just beat that bull drum all the way down here...

Down from where ? Get your facts straight please.

I was short from the top, when you were talking about glorious semiconductors leading the way to astronomical new highs. Then I reversed when MCO hit super oversold conditions.
If you remember that low on SPX held untill yesterday's close.
I took partial profits into the rally, and sold quite a few calls on positions that I kept. I think I posted quite a few things that I was doing.
Now those calls are expiring worthless, so I'm well protected. Some stocks that I was buying didn't even make new lows, like BAC. Some are bit under water of course.
But the meltdown on OPEX week isn't coming a surprize to me as I also said.

Now that we're setting up a positive divergence on MCO, I'll tell you exactly the reason why we will rally....

... drumroll.... FED MEETING ON SEPT 18th. We will stabilize and rally in anticipation of a rate cut.

Fear is thick, Summations deeply oversold, MCO's wiull set up a positive dicvergence here, and the market will start rising in anticipation.

Of those times, how many times would you have to experience gut wrenching declines in order to see your position finally become profitable?

Almost none. Maybe a couple days.

[rkd80]

[/quote] Almost none. Maybe a couple days. [/quote] hmm...thats pretty cool then. sometimes non-scientific studies are the best ones. good catch ogm!

[ogm]

[quote name='rkd80' date='Aug 15 2007, 05:14 PM' post='308389']
[/quote]


Almost none. Maybe a couple days.
[/quote]


hmm...thats pretty cool then. sometimes non-scientific studies are the best ones. good catch ogm!
[/quote]

I wasn't exactly accurate... I was looking at weekly chart.. yes, on daily it may have looked gut-wrenching for a few days But the point is. Most time VIX gets this high, its close to a bottom.

I think one major example when you would've been for quite a ride was 2002 low.. yes, the market went lower significantly, and then was shaking like crazy for several weeks.. But we all know what happened after.

In other cases even if it wasn't the total bottom... VIX > 30 = market higher then that point in the next few weeks.



Here is the chart... there is a couple more cases from 1990. Same deal.

[rkd80]

I think we can conclude that vix above that level is a setup for long, but nothing more. Not really trade able, in fact a lot of the things you mentioned are setups. MCO, Summations, etc. We need that trigger and the few times it came - we got hosed. As more of these setups align, the more reliable the next trigger will be. For now - i feel like we are in no man's land.