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Strategies & Market Trends : Galapagos Islands -- Ignore unavailable to you. Want to Upgrade?

To: Lazarus_Long who wrote (46644)	8/21/2003 11:43:35 PM
From: PuddleGlum	Respond to of 57110

Firstly, my VIX chart goes back to early '93, so we have over 10 years to look at. I disagree that the previous 9-10 years should all be classified as bubble years. We have 3 years of burst bubble years, and 2-3 years of just plain bubble years, and several years of (reasonably?) rising years. But your point is really that all one sees in the OEX chart that you showed is straight up followed by straight down, so nobody can really say what "normal" is. That point I can agree with. But I still don't think that the best approach to the VIX involves figuring out what normal is over some extended time period. The market learns variations on a theme, so the trick is to figure out what that theme is now, or when a new variation starts. In addition to using Williams%R on VIX I also use my own indicator that is similar to stochastics. That indicator has a pretty decent track record (perhaps 75%, just by eyeball) back to 1993, with its peaks corresponding to market buying opps, and troughs corresponding to selling opps. Right now it looks ready to set a higher low (but it hasn't done so yet), which would be bearish. My Williams%R is set to look at an 84-day range, and the VIX valley that we're in right now has been around for nearly 84 days, which may screw things up just a bit if I'm not careful. The last few weeks overall bear much resemblance to late April when the market exhibited great strength as it met stiff resistance. MD and Jorj stated very correctly in recent weeks that it was a difficult time to take positions. Standing aside for much of the recent few weeks would have been very good strategy.

To: Lazarus_Long who wrote (46644)	8/22/2003 12:34:34 AM
From: Jorj X Mckie	Read Replies (2) \| Respond to of 57110

do you think that the vix leveling out and finding a low range just below 20 in 1998 is merely a coincidence?