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Strategies & Market Trends : The coming US dollar crisis
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To: Real Man who wrote (901)9/10/2007 5:03:25 PM
From: stan_hughes  Read Replies (1) of 71427
 
Funny you should mention VIX -- I keep the Birdman's 10-year VIX chart bookmarked here (click to enlarge) --
stockcharts.com

I think in the not-too-distant future we might get a nostalgic run back into the mid-40s where VIX used to top out whenever the market went into sell-off mode before all these Hedge Fund Quant boxes came along and started counter-balancing even the smallest moves, thereby keeping everything (including as a consequence VIX) inside a historically narrow channel, i.e. inside the low Vol nirvana that finally blew up this summer.

You would think that a decline in the number of operating Quants and/or revisions to their Vol assumptions should result in VIX having some room to run again -- hence my interpretation that a rising VIX at only 27 says that SPX isn't finished on the downside yet near term.

And if we do see VIX 45, even I would buy some calls for the reversal play
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