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

To: Killswitch who wrote (10843)	2/28/2002 9:56:41 AM
From: Killswitch	Read Replies (2) \| Respond to of 19219

From the latest Gary B. Smith article. The chart he's talking about shows the VIX overlaid on top of the 98-00 Naz rally. It stays in a range the whole time. "Q: Gary, how can the market proceed much higher with the Volatility Index, or VIX, and the QQV (which measures volatility of Nasdaq 100 Unit Trust (QQQ:Amex - news - commentary - research - analysis) options) both at near-record low levels? History shows that a correction is nearer when these indicators are where they are now. A sustained advance higher at this time would break new ground, wouldn't it? A: Actually, no. In fact, as the chart below shows, the Nasdaq had its greatest rally ever with the VIX locked in a fairly tight trading range. And, lest you think I'm just cherry-picking, the Nasdaq had rallied consistently from '94 to '00, while the VIX exhibited the same basic action. My feeling is that we've become accustomed to viewing the VIX (or QQV) as a magic indicator. But once everyone starts looking at something else, that magic dies quickly. "