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

To: bobby beara who wrote (43998)	3/24/2000 3:21:00 PM
From: Haim R. Branisteanu	Read Replies (3) \| Respond to of 99985

BB, NAZ down 200 point from it's high today, QCOM down $1 1/2 after being up $8 Were are we going now?? Haim

To: bobby beara who wrote (43998)	3/24/2000 5:52:00 PM
From: set	Respond to of 99985

> The vix is up on a day like this ??? you bet, and it broke out right at the top of the day. Look at a 15 minute chart and see where it crossed above the resistance. gave a good sell, I thought.

To: bobby beara who wrote (43998)	3/25/2000 5:34:00 PM
From: Saulamanca	Respond to of 99985

Fear Gauge Goodbye VIX, Hello QQQ By Erin E. Arvedlund March 27, 2000 When it comes to gauging market sentiment, options professionals have long relied on the Chicago Board Options Exchange's Volatility Index. When the VIX, as it's known, rises, speculation has reached a fever pitch, and the market is due for correction. When it falls, panic has subsided, and the market tends to rally. The VIX, introduced by the CBOE in 1993, measures the volatility of the U.S. equity market. It estimates expected volatility by using real-time Standard & Poor's 100, or OEX, index option bid/ask quotes. This index is calculated by taking a weighted average of the implied volatility of eight OEX calls and puts. (The formula is outlined on the CBOE's excellent Website: www.cboe.com/education/advanced.htm.) Trouble is, the VIX doesn't reflect the herd-like sentiments of the retail investor anymore. Reason? "The public is trading something else other than OEX," explains Lawrence McMillan of McMillan Analysis in Morristown, New Jersey. McMillan contends that's why the VIX no longer reaches the extremes it used to. The VIX, he says, "hasn't traded above its traditional high point of 30 for any length of time, or below 21. As a result, we're not seeing the public panic or speculation reflected in it." Institutions, not individuals, trade index options like the OEX, McMillan explains. "They tend not to overpay, and not to be as emotional," he says. "Therefore, the VIX is losing its significance as a contrary indicator." McMillan is currently compiling another indicator, based on the options on the QQQ unit trust or the actual Nasdaq 100 Index, the NDX. "The volatility of the QQQ options is a much better thing to look at as an indicator of market volatility, for the simple reason that people care more about Nasdaq stocks than big industrial stocks," chimes in Adam Benowitz, chief options trader with Rose Glen Capital. "Retail investors know what the QQQ is, and don't know the VIX."... interactive.wsj.com