I can't see us exceeding last Sept panic VIX readings, but it looks like we're going to come close enough to put in some sort of bottom. Jumped in too early, but I've learned that it's easier for me to judge market pain if I'm long prematurely and then increase my position when the fear rises.
5 Periods where the VIX has been in the neigbourhood of 40 since 1998.
1) A period between 8/27/98 and 10/9/98 where we churned around 40 for a while, which was the prelude and last stop before launching into the bull market of a lifetime (or maybe 2 or 3).
2) 4/14/2000. Nasdaq down hard to low of 3266 VIX spiked to 41.5, and then a market bounce, only to fade over the next month. During this time the VIX steadly drops from 40 to 30's. Around a VIX of 29, Nasdaq made a successful, although temp bottom at 3164 (5/23/00).
From Vix spike to 41.5 on 4/14 to rally peak about 3 months later a +25% gain in the nasdaq (I know, the VIX is for the S&P100). Interestingly, the rally top was marked by an unusally low reading for the VIX at around 19. After top passes, market again declines and VIX begins ascent.
3) 3/22/2001. VIX hits 41.99. Nasdaq intraday low 1794, ultimate low 1706 two weeks later. From there, a furious 2 month rally to 2328, corresponding with a VIX of 23. VIX reaches low of 20.84 on 7/3/01 and you know the rest.
4) 9/21/2002 VIX hits 57.31, which is the highest reading since 1987, when, btw, it was a collective shit-in-the-pants, 172.79. Interestingly, the VIX nails the bottom in Sept - no lags or retests. Perhaps that gives us some insight into the difference between a fast spiking VIX and a climbing VIX that ends in a peak.
5) Today we're at a vix of 39.36 after hitting a VIX nadir of 18.87 on 3/28, which is the 2nd lowest reading in 4yrs. The vix has been climbing steadily since May and above 30 since mid June.
I added JNPR, LSI, and BVSN (I like the potential for a big short covering rally there). |
