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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: JDinBaltimore who wrote (29605)	10/14/1999 1:28:00 PM
From: LaVerne E. Olney	Read Replies (2) \| Respond to of 99985

optionsource.com Tricky VIX and Its Broad Market Implications The Chicago Board Options Exchange Market Volatility Index (VIX - 28.88) has spiked 30 percent higher in the last two days (see adjoining graph). This strong appreciation in the VIX is a sign that option premiums are becoming richer by the day as investor demand and higher volatility are priced into the S&P 100 Index (OEX - 671.21) options. Historically, such a spike in the VIX has had bullish implications for the OEX over the ensuing 10 trading days. Below is a table of 20 occurrences since 1989 in which the VIX spiked 30 percent over any two-day period. According to history when the VIX spikes to this degree over a two-day period, the OEX tends to rally an average of 1.5 percent over the following two-week period. Since 1989, the OEX tends to appreciate 0.65% over any ten-day period.