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Here's a somewhat messy monthly chart of
SPX/VIX. Hopefully it does a better job of illustrating what I was asking
the group earlier. For the past 4 years or so VIX has been a very reliable
tool in helping to identify minor/major market tops but it hasn't always
been reliable, and the last time we hit 19ish a couple of months ago it
"missed".
As I said before, I think this market looks like
an accident waiting to happen, but the daily's have not broken down or
setup/triggered short yet and the marginal higher high/higher low grind higher
is still intact....for now at least.
----- Original Message -----
From: "tradewynne" <<A
href=""><FONT face=Verdana
size=2>tradewynne@xxxxxxxxx<FONT face=Verdana
size=2>>
To: <<A
href=""><FONT face=Verdana
size=2>realtraders@xxxxxxxxxxxxxxx<FONT face=Verdana
size=2>>
Sent: Friday, December 05, 2003 5:34
PM
Subject: Re: [RT] The Market
environment
<FONT face=Verdana
size=2>> --- In <FONT
face=Verdana size=2>realtraders@xxxxxxxxxxxxxxx<FONT face=Verdana
size=2>, "Bobh" <<FONT face=Verdana
size=2>BHEISLER@x...> wrote:>
> I agree with you on the 70's style whatever-it-was market for which
> I use the term transitional....neither bull nor bear. With the
> exception of brief periods of volatility I expect more of what we've
> seen the past 6 months - but it will slowly/steadily get worse and
> compress even further.> > > > Yes, I was referring
to environmental tools such as breadth, vix > etc. >
> breadth still works....even some pre year 2K mechanical A-D
systems> work...untouched, untuned. granted you can't get blood out of a
rock:> smaller moves mean smaller net per trade.> >
>Price patterns and trendlines/horizontal lines still work just fine.>
> > > I hope you're right on a return to volatility. But
until then I'll > continue to avoid the indexes.> > I
suspect volatility will come and go like it always has. Indeed, I >
suspect we agree: the current contraction is a reaction to the very >
strong trends that followed 1970's contraction (and vice versa).> Periods
of "rest" (contraction) are followed by periods of activity >
(volatility, impulsiveness, trendiness). Breaking the current wedge
> (contraction) is the first order of business before anything >
dramatic, even short term, happens....that was my original point. >
Indeed, lulling folks to sleep or getting them "to avoid the indexes" >
is part of the process.> > > > > ----- Original
Message ----- > > From: "tradewynne" <<A
href=""><FONT face=Verdana
size=2>tradewynne@x...>> > To:
<<FONT face=Verdana
size=2>realtraders@xxxxxxxxxxxxxxx<FONT face=Verdana
size=2>>> > Sent: Friday, December 05, 2003 2:35 PM> >
Subject: Re: [RT] The Market environment> > > > >
> > --- In <FONT
face=Verdana size=2>realtraders@xxxxxxxxxxxxxxx<FONT face=Verdana
size=2>, "Bobh" <<FONT face=Verdana
size=2>BHEISLER@x...> wrote:>
> > > Well, my next preference would be both but not very far in
> either > > > direction.> > > > >
> > > Normally after boom/bust periods, like we're in now, a market
> tends > > > to do a lot of nothing for a very long time.
> > > > > > I don't disagree with that, but a lot of
nothing like we just had > > > could mean a trip back to < 800?
Or up another 300 SPX points? > Right?> > > I'm on record,
and I took a lot of flack for it here,> > > saying we could see a
sort of 70's style bear. That market "did> > > nothing" for a very
long time, but in the context of a 50% range > (Dow > > >
500-1000). Iraq ain't as bad as 'Nam yet (50K body bags back then > >
> kids), but it smells a bit like those bad old days. It's not >
George > > > Sr.'s wam-bam-thank-you-mam clean made for TV kinda
war, that's > for > > > sure.> > > >
> > > Plus favorite tools (outside of Price) that may have worked
> well in > > > a bull or bear market are not likely to work
as well, if at all, > in a > > > transitional
market.> > > > > > Are you saying stuff like breadth
or trendlines or price patterns > are > > > no longer
working? I agree the market is less trendy, but even > within >
> > that context markets tend to cycle from choppy to more volatile
> and> > > back again. FWIW, multiple weekly ADX's (just a
way to > > > quantify "price" movement, or lack thereof) are at
their lowest > > > levels in three years....sooner or later they
will begin to rise > > > again when price becomes more
impulsive.> > > > > > > > > > >
Just my 2 cents.> > > > > > > > > >
> > ----- Original Message ----- > > > > From:
"tradewynne" <<FONT face=Verdana
size=2>tradewynne@x...>> >
> > To: <<FONT
face=Verdana size=2>realtraders@xxxxxxxxxxxxxxx<FONT face=Verdana
size=2>>> > > > Sent: Friday, December 05, 2003 10:31
AM> > > > Subject: Re: [RT] The Market environment> >
> > > > > > > > > > > > And if I had
to bet $1 on where we go from here - a melt-> up, a > > >
melt-> > > > > down or neither, I'd put in on
'neither'.> > > > > > > > > > How about
'either'? There's a pretty tight wedge that's > formed > > >
dating> > > > > back to July. The rising upper trend line is
near 1075, and > the > > > lower > > > >
> is above 1040. As long as it stays inside the lines, it stays > >
> inside> > > > > the lines <g>. As big wave surfers
say, "everything is OK > until> > > > > something goes
wrong." IOW, no worries until someone gets > killed.> > >
> > Anyway, it makes sense to me to watch how the market acts >
around> > > > > those TL's. Wedges often can lead into
*either* accelerations > or > > > > > sharp breaks or
they persist a while longer....but sooner or > later> > >
> > someone gets killed by a surprise wave.> > > > >
> > > > > > > > > > --- In <A
href=""><FONT face=Verdana
size=2>realtraders@xxxxxxxxxxxxxxx, "Bobh"
<<FONT face=Verdana
size=2>BHEISLER@x...> >
wrote:> > > > > > Since we are in a post-bubble,
transitional market I'm > > > wondering if > > > >
> this comparison is applicable now. It reached single digits >
back > > > in > > > > > the early 1990's and I
wouldn't be a bit surprised if we saw > > > those > >
> > > levels again. > > > > > > >
> > > > > I don't disagree that this market looks like an
accident > > > waiting to > > > > > happen, but
it's looked this way since June. And if I had to > bet >
> > $1 > > > > > on where we go from here - a melt-up,
a melt-down or neither, > I'd > > > put > > >
> > in on 'neither'.> > > > > > > > >
> > > > > > > > > ----- Original Message -----
> > > > > > From: EarlA > > >
> > > To: <A
href=""><FONT face=Verdana
size=2>realtraders@xxxxxxxxxxxxxxx >
> > > > > Sent: Friday, December 05, 2003 8:00
AM> > > > > > Subject: Re: [RT] The Market
environment> > > > > > > > > > > >
> > > > > > Attached chart marks off 7 years
of SPX vs VXO (old VIX). > > > Note > > > > >
the 3 heavy red arrows marking extreme low readings w/o > 7/24/98,
> > > > > 9/8/00 and current.> > > > >
> > > > > > > Earl> > > >
> > ----- Original Message ----- > >
> > > > From: <A
href="">SLAWEKP@x<FONT
face=Verdana size=2>... > > > > >
> To: <A
href=""><FONT face=Verdana
size=2>realtraders@xxxxxxxxxxxxxxx >
> > > > > Sent: Thursday, December 04,
2003 11:48 PM> > > > > > Subject:
Re: [RT] The Market environment> > > > > > > >
> > > > > > > > > >
VIX is in rare Fibo window cycle for low between now & > >
> Monday > > > > > Dec 8th.> > > > >
> > > > > > > low for VIX =
high for SPX> > > > > > > > > > >
> Weekly Broker index is topping......this is also
> leading > > > > > indicator> > > >
> > > > > > >
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