How To Write Covered Calls - An Ongoing Real Case Study! Message Board

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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!

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To: randy kay who wrote (9040)	11/15/1998 2:45:00 PM
From: Herm	Read Replies (1) of 14162

The VIX shows the raise and fall of volatility. When it falls low the markets are going up fast and the volatility is very low. That means everybody is too bullish so the opposite happens and the markets go into a spasm if the form of a correction for profit taking. So, the last two major VIX events were the July market plung into the abyss. Just about every stock got hammered. The VIX moved from 18 in July reading low to a sky high record of +-48 in October. So, we had a plung followed by a huge upward gap bounce. Now, that same VIX is once again approaching a VIX range of 25 to 27. If is drops below 25 watch out! The profits everyone has been making will be cashed out! Meaning? Another correction! "A raising tide may raise all ships" and a flush of the toilet cleans the bowl out! All I'm saying is that this bull will peter out soon! We will see what Greenspan is going to do Tuesday. Everyone will watching to see if he will sneeze.

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