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To: pcyhuang who wrote (1290)	8/21/2007 12:17:08 AM
From: silenceddissenter	Read Replies (1) \| Respond to of 1718

Phil often says when the vix is high you buy, and when it is low you go. Let me ask you a macro question, if the dollar is inflated to the high heavens - certainly won't the markets go up as people take thier dollars and push the market to say 20K from 13K? So while it may be smart to buy when the vix is high and ride the wave up - will the ride up be enough to offset the price increase of tea being imported from china? (I like organic green tea imported from remote regions within china - can I expect the prices to come down soon?) Even though phil constantly says buy when the vix is high = he has been saying almost everyday now that a crash is on its way - how does he resolve these 2 ideas in his head that contradict each other? Maybe you can show us some vix charts from the depression era or from japanese deflation or from russia markets in 98 or argentia markets in the hyperinflation etc etc

To: pcyhuang who wrote (1290)	8/21/2007 8:21:46 AM
From: SouthFloridaGuy	Read Replies (1) \| Respond to of 1718

It's quite possibly different because structured credit has distorted the signals that often led to gradual volatility. The uninhibited increase in vol from near single digits to mid 30's within months is close to unprecedented. While I personally knew the structured bid was out there, and I knew it was distorting things, I didn't know to what extent - nobody really knew and it would be foolhardy for one's P&L to guess otherwise by shorting or not staying in the rally. So yes, the market COULD make new highs, but it would be a weak rally and would most likely be followed by a crash if the 200 day moving average level of volatility is 20%+, a figure often associated with bear markets. The switch between bear and bull has been turned on overnight. A warning shot has been given and I took a 4% peak to trough loss after being in this market for 3 years+. I'd say that's pretty good if the market makes a 20%+ decline. You should look at 1987 for a reference.