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Non-Tech : NOTES
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To: Didi who started this subject5/31/2001 10:04:47 PM
From: Didi   of 2505
 
John Murphy: "VIX Near February Low", 5/26/01...

stockcharts.com <---accompanying charts

Rearranged some.

>>>John Murphy's Market Watch
Sector and Economic Cycles

VIX NEAR FEBRUARY LOW.

We suggested earlier in the week that several of the market indices (like the Dow) were up against formidable resistance and looked overbought.

We also suggested that seasonal factors were turning against the market.

Another indicator that suggests the market is vulnerable to more selling is the low level in the CBOE Volatility Index (VIX).

Chart 1 shows that the VIX has dropped into the low 20's and is at the lowest level since February.
... This is a contrary indicator.
... Low points in the VIX usually coincide with market tops.
... The last two troughs in the VIX occurred during September and February, both coincident with market peaks.

--------------------------------------

VALUE STOCKS UP AGAINST RESISTANCE.

Market leadership this year has been in "value" stocks as opposed to "growth" stocks.

That being the case, we think it's worth noting that the S&P Barra Value Index (SVX) has come within striking distance of its January high and appears to be stalling. (see Chart 2) [It's short-term readings are very overbought].

Since most of the buying has been in value stocks, new selling in that group would be negative for the market.<<<
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