Dr. Shell, spkg of implied vol/Rainsford, thot Ud like this: Volatility Index (VIX.X) is 1 of t'most important mkt timing indicators. Its recent drop has us preparing for a market stall of some sort. Each time the VIX.X dips below its 200SMA, the mkt experiences a decent pullback. Now granted, this pullback usually takes several days to fully develop in most cases, but it should be noted the consistency of this occurrence is very high.
Since the beginning of 96, there have been 13 times in which the VIX.X dipped to or slightly below its 200SMA. And guess how many times the market has subsequently experienced a decent drop? 13 times. If that isn't accuracy, nothing is.
Things could turn out to be different this time around, but would NOT bet heavily against it. So, what's a trader to do? Well, nothing really. Simply being made aware that the market may stall sometime during the next few days is enough. It's the element of surprise that gets traders into a lot of trouble.
Knowing what VIX.X is suggesting, already helps eliminate the possibility of being surprised by a market pullback. Be more inclined to look at upcoming short plays more carefully.
While you do not have to do the same, you should at least focus on
curtailing your expectations by being satisfied with less. If a play has delivered a 1 1/2 gain versus an expected 2, take it. In other
words,just alert/nimble.
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Fer us gals always looking fer an edge...I suggest you tinker w/this'un and lemme know whatcha think...
O/49r |
