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 : News Links and Chart Links -- Ignore unavailable to you. Want to Upgrade?

To: Les H who wrote (2134)	6/19/2002 2:02:14 PM
From: Les H	Read Replies (1) \| Respond to of 29596

VIX and VXN Below is taken from Price Headley's morning column: Wednesday stocks are getting pounded, with S&P futures dropping 13.70 points while Nasdaq futures are plunging 42.00 points. The disappointing aspect of today's drop if you are a bull is that the market saw better-than-expected earnings from Oracle (ORCL) and Jabil Circuit (JBL), yet has chosen instead to focus on the sales warnings from Apple Computer (AAPL) and Advanced Micro Devices (AMD). This is a bearish reaction to the mix of news, showing the market is still in a downtrend. It doesn't help that Micron Technology (MU) received a grand-jury subpoena regarding an industry-wide Department of Justice probe into alleged anticompetitive practices among the DRAM companies. Nor is it good that the U.S. dollar continues to plunge to new lows, as the Euro currency made a 17-month high versus the dollar. I had said yesterday that the final lows were not yet in place, as fear levels had not reached truly excessive proportions yet. A reader asked that I comment on the CBOE Volatility Index (VIX). In my prior forecasts of what it would take to make a bottom, I had noted that I expected the market would need to see a VIX reading between 35 and 40 at a minimum. The VIX hit a high of 36.01 last Friday morning, which did indeed lead to some short-term buying. But remember that the VIX did spike to over 57 on the post-September 11th plunge in stocks. We're starting to get closer to the levels of fear we need to see to mark a bottom, but it still is expected to be several weeks away. And the problem is that the last leg of declines is often the steepest, as investors adopt a "get me out at any price" mentality and sell stocks wildly. As our ADX bearish signal from two weeks ago showed, the average decline on these past moves was right around 5 weeks (or 25 trading days). We still have 3 weeks left on the downside according to this indicator. I expect the selling pressure to intensify here. This will eventually set up another great buying opportunity, but only after we see more downside first. forums.delphiforums.com