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Strategies & Market Trends : Classic TA Workplace -- Ignore unavailable to you. Want to Upgrade?

To: marginmike who wrote (20125)	11/8/2001 1:09:32 PM
From: marginnayan	Respond to of 209892

Watch the VIX by Price Headley dated 11/07 Markets are up again this morning, on optimism from overseas aggressive rate cuts. Both the Bank of England and the European Central Bank cut rates by 50 basis points, amid a growing recognition of the impact of the global slowdown. The market remains strong, but sentiment data is saying you should kep your stops tight on new long positions. The CBOE Volatility Index (VIX) is currently scraping down along the 30 level, which I believe is cause for concern. Some might ask "Isn't 30 a relatively high level looking back over the past decade?" The VIX has usually traded between 20 and 30 for the most part, but what matters in my book is the recent volatility in the last month of so, not the volatility of past years. Considering that the VIX spiked as high as 57.71 on September 21, that level has now nearly been halved. That's what happens when fear at VIX peaks converts into high hopes and greed as the VIX makes a bottom. The problem with VIX bottoms as a market topping indicator is that the VIX often can go for days or even a couple of weeks at such low levels before the market will top. That why we don't have a problem riding some long positions here, but we want to keep our stops on a close under the prior day's low at a minimum, to make sure we are gone when this uptrend breaks down. Support & Resistance Levels: SUPPORT RESISTANCE Nasdaq Composite 1800, 1750 1900, 1950 S&P 500 1100 1125, 1140 Dow Industrials 9500 9700 -----------