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Strategies & Market Trends : The Options Box

QQQ 608.89

+0.6%

Nov 25 4:00 PM EST

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To: Bridge Player who wrote (9800)	2/28/2001 9:04:05 PM
From: hobo	Read Replies (1) of 10876

BR, Look at these charts... VXN (based on the NDX) mach.quote.com VIX (Based on the COMPQ) mach.quote.com These represent volatility in the options of the stocks in the above indeces. It also represents the degree of fear in investors (versus complacency). The higher the volatility, the higher the premium on options and the greater the fear of investors. Until they get a higher, the scenario that you are hoping for will not have a high degree of probability. Perhaps the Put/Call Ratio is beginning to get closer to the desired level to expect a change in direction... here is a chart of the ratio: stockcharts.com a couple of explanations of the same: stockcharts.com thestreet.com The above from the "Technical" angle. From the fundamental point of view I see the following potential for problems that will prevent a powerful turn around: 1. Oil prices are regaining ground. 2. Given the Energy situation in California, chances that Natural Gas prices will recede are small. 3. Given the probability of a recession, both companies and individuals are not spending as much as they used to. 4. Once the trend establishes... it takes a great deal of power from buyers and exhaustion by sellers to reverse things... probably, this is why excesses in the markets occur... This has not happen yet. That does not mean that there could be reactions (rallies), that could lift the market... but these will be sold .. . again, and again... until there is a true change of trend. just my opinion

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