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Strategies & Market Trends : KEEP IT SIMPLE TRADING

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To: mistermj who wrote (85)8/2/2003 4:21:39 PM
From: Return to Sender   of 321
 
Amateur Investors Weekend Market Analysis (8/2/03)

amateur-investors.com

"Yesterday we looked at the fact that periods of low volatility are followed by high volatility and that periods of high volatility are followed by periods of low volatility. Obviously, we are in a a tight trading range (low volatility) that will likely lead to a substantial breakout one way or another. Which direction that breakout will take is never perfectly known, but let's look at some historical statistics to guide us. And, in my opinion, the best indicator to help get us to an opinion is the VIX.

Through today, the VIX has gone 98 consecutive days without making a new 20-day high. This ties the longest streak since the VIX's inception in 1986. The other time this happened, it ended on 9/6/00. After making that 20-day high, the S&P immediately lost 10% of its value over the next month and a half. The third-longest period the VIX went without making a new 20-day high was 72 days ending 8/11/87. This preceded the crash of October 1987 The fourth-longest period was 71 days ending 1/24/03. From there the S&Ps fell almost 7% in the following 3 weeks.


The charts I linked you to this morning are only just a few of the VIX charts I have done on the Sector Investing thread at iHub. The discussion referenced by you in your last post refers to 5 and ten day moving averages. I used them as well.

investorshub.com

investorshub.com

RtS
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