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Strategies & Market Trends : Tech Stock Options -- Ignore unavailable to you. Want to Upgrade?

To: SE who wrote (51054)	8/28/1998 2:58:00 PM
From: VS	Respond to of 58727

Scott, fwiw, i have done some backtesting on the VIX. It can be a very useful indicator, but like all other indicators, one has to use it in the context of other indicators and the overall market. In a strongly trending up market, for example, the vix may indicate complacency to some observers, but that does not mean a turnaround is necessarily imminent. What i have not been able to do successfully is establish absolute levels at which the VIX indicates a buy or a sell. A week or two ago, for example, some were commenting that a reading of 35 on the VIX is a strong buy signal. Today, we have a reading >40 and still no turnaround. Fear naturally accompanies the kind of market we've had this week. Given that nervousness is likely to linger till the market environment changes, imho i would not consider the VIX a leading indicator for a market reversal at this point. Vince