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Strategies & Market Trends : Waiting for the big Kahuna

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To: William H Huebl who wrote (14711)3/7/1998 1:02:00 AM
From: Follies  Read Replies (1) of 94695
 
** On Topic **

Bill,

I have been watching the VIX closely and I agree it looks very similar to Oct just before the mini Kahuna, but I don't understand why it works unless its a contrary indicator.

VIX is meant to represent the implied volatility of the underlying options to S&P securities as I understand it. Is it using the black scholes model? A lower number means less volatility. Tuesday or Weds was 5 or 6 days below 20 , first time below 20 in a year, but 1995 and 1996 were almost always below 20. So what are we looking at, a sharp rise after a downward trend? What does that mean in terms of the market? People are getting complacent (less volatility) and then get scared (sharp increase) then panic?
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