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Strategies & Market Trends : The New Economy and its Winners -- Ignore unavailable to you. Want to Upgrade?

To: damniseedemons who wrote (13009)	7/24/2002 10:29:50 AM
From: Wizard	Read Replies (1) \| Respond to of 57684

yah agreed. one indicator has never been any good for very long and the VIX is no different. I am not saying the VIX is infalliable. all indicators are falliable. there is no way to measure emotion consistently over time. I agree with your program trading comments. VIX = insurance premiums paid (premiums on puts). that is what it is. You might be willing to pay $20k insurance for a $30k car and then actually get $30k back if your car explodes. however, if everyone is paying $20k insurance, it has generally signalled panic and not necessarily that cars are about to be wrecked all over the place. that is not a perfect analogy but it isn't too far off. No indicator can predict forward stock market returns but it is a very good indicator of panic.