Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Portfolio Protection + Money Management for the Long Term -- Ignore unavailable to you. Want to Upgrade?

To: BDR who wrote (39)	4/15/2000 11:49:00 AM
From: BDR	Read Replies (2) \| Respond to of 57

A question for the chartmeisters and tea leaf readers: can we take some comfort from the VIX which hit a high on Friday of around 40+ not seen since the 10/98 and 10/97 bottoms? From the Decision Point website (subscription): ABOUT THE VOLATILITY INDEX By Nicholas Proffitt The VIX is calculated by taking the weighted average of the Implied Volatility of 8 OEX calls and puts with an average time to expiration of 30 days. As such, it measures fear and optimism as manifested in OEX options activity. When large numbers of traders become fearful, the VIX reading rises, and when complacency about the market reigns, the VIX reading falls. And since the vast majority of put/call buyers are wrong and lose money, it's usually a smart move to fade (go counter to) what the VIX says the the crowd is doing.

To: BDR who wrote (39)	4/16/2000 10:23:00 PM
From: Tom Trader	Read Replies (1) \| Respond to of 57

Dale re Now I am wondering how much more there is to this decline. Quite honestly, I have no idea as to how much more there is left to the decline. For my part, other than the action that I took with my retirement accounts, I have not sold anything -- and have no intention of doing so. I shall ride this out -- and continue to move back into stocks in my retirement accounts and in due course put to use cash in my taxable accounts. Given that I have no idea how much downside there may be, I shall continue to phase into additional long positions. In the long run, I am confident that all will be well. I have heard that the 2800-2900 level represents support on the NAZ -- that is a good 15+% from where we are right now. I have no idea if we will get down to those levels -- though the action in the futures and international markets as I write this seems to suggest that we are in for a very rough open tomorrow morning. I don't know whether you follow cycles but it has been suggested by some of the cycle gurus that it is in May that there are some major cycle lows which should establish a bottom. FWIW, when one has a decline such as the one that we are experiencing the momentum is so strong that usually the first rally from the bottom where ever that is will be sold at some point -- now we could rally several hundred points from that bottom before the selling commences. I am weighing the possibility of liquidating a portion of my long positions into that rally and acquiring some "at the money" LEAPS as place-holders simultaneous with the liquidation of the long positions. I would thereafter look to reestablish the longs when the market goes back down to test the lows. I am not entirely certain whether I will employ this strategy -- but I am certainly considering it; as I scan through the few threads that I monitor, there is shock and pain at what has occurred but the type of panic and capitulation that one associates with a good bottom having been made does not seem to be in place. However it is because timing these things is so difficult that I intend phasing into longs if we continue to decline.