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Strategies & Market Trends : Stock Attack -- A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: donald sew who wrote (30170)	9/19/2000 8:54:47 AM
From: dennis michael patterson	Read Replies (2) \| Respond to of 42787

I always used the Vix for ST trading. But about 2-3 months ago, it went down, stayed down, and I lost the feel for the market with this indicator. Interesting that it still works with your system! That a plus for your methods, IMO

To: donald sew who wrote (30170)	9/19/2000 6:27:06 PM
From: Dan Duchardt	Read Replies (1) \| Respond to of 42787

Don, Dennis I don't think the VIX "stopped working", but interpreting VIX purely as a contrary market indicator is not sufficient. I have not gotten into the details of calculating VIX, or volatility in general, but as the name implies VIX is a measure of volatility of the OEX. Take a look at this chart: quote.yahoo.com The upward spikes in VIX are associated with sudden changes in the direction of OEX, and those changes are usually more dramatic at bottom reversals. Tops tend to be more rounded, and hence far less volatile. The low VIX of the last several weeks is an indication of how smoothly OEX has been changing, not so much the direction it is going. If OEX suddenly dives lower from here, and reverses hard, we will see another VIX spike. If we happen to get a rounded OEX bottom, we can reverse and go higher without VIX running up hard. As you can see from the chart, such events are rare to nonexistent. Those bottoms are always so spikey, but they don't have to be. Dan