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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA -- Ignore unavailable to you. Want to Upgrade?

To: Killswitch who wrote (10516)	2/16/2002 7:04:48 PM
From: nsumir81	Read Replies (1) \| Respond to of 19219

Low VIX..see what VIX was at the start of Oct 98 (60 ish?) and Oct 99 rallies (35 ish?). Also look at the broader picture taking into account that you had the market tacking on gains AFTER coming off a huge bullrun from 1994 and even before that going back to the early 1980s. You had the peace dividend coming off the end of the Cold War and the establishment of a new world order after the Persian Gulf War that placed the U.S. as the lone superpower with no Soviet Union to match it. You had the fragmentation of the former Soviet Union that is believed by some to have subsidized the world economy through raw material exports. Then, you did not have a big slowdown in the economy, no huge layoffs, no major bankruptcies like Kmart+Montgomery Ward+Global Crossing, no credit problems with companies like Qwest, no huge capex cuts (a leading indicator imo) by Intel (!), Verizon, Taiwan Semi etc, no commoditization of PCs/components to cite one prime example (except for disk drives)-now you have memory AND the CPUs also going that route, no deflationary pressures, no Enrons. You had pricing power back then. You had rate cuts on options expiration days, Y2K goosing of the money system into an already hot economy, free this and free that (remember?), page views, red-hot B2B concepts, etc. (In 1997 and 1998 we had financial 'crises' mostly aggravated imo by currency speculators and traders that then mysteriously vanished just as suddenly they came into being in 1994-5 with the Mexican currency crisis. Whatever happened to all the massive corruption, chaebols, etc etc that all were citing as some of the reasons for the downfall (then) of the Asian 'Tiger' economies and their currencies? Even Jeffrey Sachs noted their sudden 'V-shaped recoveries' as suspect and taking place just months after all hell broke loose on 'deep-rooted problems'. V-shaped imo since the downturn was one part of the V powered up and down by Hot Money.) BTW the Asian markets except Japan have been largely performing very well lately. Just from what I have read... Oh, boring fundamentals.

To: Killswitch who wrote (10516)	2/17/2002 12:22:47 AM
From: Dexter Lives On	Respond to of 19219

Hi Brian, I was really intrigued that we could move into a more stable, lower return, lower volatility environment; that would catch a lot of bears and bulls offguard. Many other factors point to greater volatility and more uncertainty, but it's an interesting possibility and certainly not something many are looking for. A new lower VIX range could be made possible by a trading range, even one with a downward or upward bias. One piece of evidence that confirms this is the number of puts sold recently (and related P/C ratio). All those options being written at relatively low implied volatility levels, at least for the index options, suggests the option writers see a diminishing volatility. They would pocket the value all options lose as we transitioned to a lower return/volatility environment. It would maker managing max pain easier as well. Rob