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Non-Tech : Dorsey Wright & Associates. Point and Figure

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To: Quest who wrote (9037)8/24/2000 12:42:41 PM
From: Tommy Dorsey  Read Replies (2) of 9427
 
I did in my original discussion. It is reverse. When volatility is low market has rallied up and is due for a correction, in general. Risk high for longs. When VIX is high market has declined and is due for some sort of bottom and probability is up prices and high risk for shorts. At a minimum for option players it is not good to write calls when VIX is low. Buying puts would be a better play to hedge. Also if you are right and the market does correct, declining, the VIX will rise and premium over intrinsic value in the put should expand. T
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