Technical analysis for shorts & longs Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Technical analysis for shorts & longs

SPY 689.17

+0.2%

Dec 11 4:00 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: j g cordes who wrote (37611)	7/13/2002 8:46:28 PM
From: Return to Sender	Read Replies (1) of 68959

Wow that was a real eye opener. The VIX was actually 170 in 1987? Incredible! Judging by the long history of the VIX back to 1986 (the CBOE has since calculated back values for the VIX using historical OEX option prices), this is a significant "last line of defense" for the VIX. This is because each time the VIX has penetrated the 40-to-42 zone, it hasn't stopped until it reached 55, at least on an intraday basis. Back in October 1987, "the Crash" blasted the VIX to the unfathomable level of 170 (see the chart below). Investors who had shorted OEX put options without protection (it was a very popular strategy leading up to the market crash) were forced to pay exorbitant amounts to cover their losses. Remember the bold statement then check this chart. Penetration of the 40 to 42 area does not necessarily mean an immediate trip back to 55. It fell before back below 20 before making that trip once. stockcharts.com[l,a]mhclyiay[d19900101,20020708][pb50!b200!d20,2!i!f][vc60][iUb14!Uk14!Ul14!Lp14,3,3!Lf!Lc20!Lah12,26,9]&pref=G I don't see that bolded statement as being 100% correct. Do you? That being said I do think the VIX is headed back to 55 sometime this year. RtS

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next