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Walt, interesting post, thank you. How is the fear index calculated?
Earl
-----Original Message-----
From: Walt Downs <knight@xxxxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Tuesday, September 29, 1998 6:12 AM
Subject: FUTR GEN: Interesting Short-term situation in SP500
>An interesting short-term situation has developed in the
>SP 500 December futures contract. Indications are for
>possibly extreme lower prices by Friday. Here's the
>analysis:
>
>The Fear Index reads greater than 99%. Historically,
>over the last year, the SP has experienced price drops
>ranging from 50 to 150 points within 4 days of high
>DFX readings. This indicator is 4 for 5 this year, so
>the odds are : 80% probability prices 50 to 150 points
>lower in the short-term.
>
>Counter-trend Tuesday's -- This effect is often seen in
>the SP. Tuesday's tend to reverse the short-term trend.
>Odds are : 56% probability lower close.
>
>Day 6 High/low effect -- The SP tends to trade from 6
>day highs to 6 day lows. If we hit the highs of 3 days
>ago, expect to see some monster sell programs. On lower
>prices with no higher highs, expect a challenge of the
>most current 6 day low.
>
>Modified Taylor Method -- This indicator says today is a
>"Sell" day. If today's close is higher than it's open, and
>price touches the high of 3 days ago, then the odds will be
>80% that Wendsday will be the "Sell" day. If the "sell" day
>is completed today, expect a short - term "short-sell"
>up day on Wendsday follwed by an ambivalent Thursday. Today
>is important to this method and the SP. Friday's action will
>tend to mimic today's action.
>
>
>Fuzzy Gaps -- This indicator uses fuzzy logic to locate
>logical gaps that may not be represented by price action
>Here is the statement, and the odds: If today's Open is
>greater than yesterday's close, and today's Open is less
>than yesterday's high then there is a 73% chance that
>prices will close lower than yesterday's close, and a
>47% chance that prices will close lower than yesterday's
>Open.
>
>Walt Downs
>CIS Trading Cos.
>http://cistrader.com
>
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