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Strategies & Market Trends : Classic TA Workplace -- Ignore unavailable to you. Want to Upgrade?

To: skinowski who wrote (126665)	12/3/2005 10:26:50 PM
From: Win-Lose-Draw	Read Replies (1) \| Respond to of 209892

$VIX is related to emotions... VIX is related to trading ranges, not emotions, and what it most closely tracks is the rate and size of overnight gapping and intraday liquidity. Large, frequent gaps and intraday liquidity holes will cause a dramatic rise in VIX, lack of gaps and orderly intraday markets lead to declining VIX. There is no correlation between VIX levels and "what happens next": the best bottom in the late 80s occured with a VIX at 150, the best bottom of the mid-90s occured with VIX at 10. VIX isn't predictive, it is lagging. Further, VIX is a number representing a percentage of SPX; there is no rational by which it should climb with rising SPX or decline with falling SPX since it is already normalized.