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.

Technology Stocks : INTEL TRADER -- Ignore unavailable to you. Want to Upgrade?

To: Chris who wrote (2565)	4/22/1998 9:11:00 PM
From: MonsieurGonzo	Read Replies (3) \| Respond to of 11051

Chris; RE:" VIX.X Buy and Sell Signals " >What does it mean (to market conditions) when VIX.X trends down or up or reverses itself ? I'll do my best to tell you what I know about it, Chris; Jrgen and Bob (IT ot 'IntelTrader') follow indicators like this, and TRIN, TICK, etc., and probably know more about these things than I do. Let's refer to the VIX.X daily candlesticks on this chart generator... quote.com ...it basically runs counter-to the market sentiment. A down-trending VIX.X is bullish, and an up-trending is bearish, for the entire market. Note the 3 candlesticks just before 23-MAR. there's a bearish, red one; then one that looks like a 'plus sign', called a Doji by the Japanese traders (when the open is more or less equal to the close); then a bullish white candlestick. That's a reversal pattern called a Morning Star. If VIX.X is gonna start going up, then the major market is gonna start going down. Today's candlestick at ~19.80 looks like it might become another Morning Star, Chris - a red candle, followed by a little star that is lower; and if tomorrow is a bullish white candle on the VIX.X - we can probably expect a reversal in this indicator - a VIX.X "Sell Signal". When the VIX.X is very high, in and of itself, some traders interpret that as a VIX.X "Buy Signal". Note that it was astronomical on 12-JAN, which was the blow-off low of the year. You'll see that VIX.X spikes up on sell-offs, which is when we're supposed to have "balls in one hand, money in the other" and buy (something) when everybody else is selling, and the world looks like it's falling apart. if you bought 2 LEAPS on every stock in the DJIA-30 on 12-JAN, you'd be passin' out cigars right now (^_^) I interpret the reversal around 23-MAR, and subsequent UpTrend, as MM's taking profits before the end-of-quarter. They moved dinero around for a few weeks, when VIX.X was poppin' off of ~25. Then folks bid up stuff in anticipation of QTR-1 earnings, volatilities decreased, and we got to below 20 again - which could be sustained, meaning prices continue to just move on up - or could reverse here, meaning that a sell-off is coming. Because the DJIA and the NAZ often diverge (but rarely for long) the implications for TechStocks are not always the same for DowStocks. If the VIX.X has a bullish white candle tomorrow, that makes the chart look like it did on 23-MAR, we should expect the market to behave as it did then - only thing is, it doesn't tell us which sectors or specific stocks will be affected the most. If I sound a little bearish, Chris - it's because I am (^_^) TechStox are hot though, and that's for sure! If the major market has a little correction, and the Techs don't tank, but rather - consolidate it will confirm, perhaps, that a lot of MM dinero has gone into them, and that their prices will be somewhat supported. Lord knows, they fall a lot faster than they rise! I hope that explanation helped a little bit; Try asking some of the gurus on the T/A threads about VIX.X Chris - I'm certainly no expert on this stuff! -Steve