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Hello Bob,
Both intraday and implied volatility have violated their 5 year range
breaking to downside. Most telling thing here imho is this happened on
autumn, historically MOST volatile season.
Best regards,
Alex mailto:alex_bell@xxxxxxx
Saturday, December 6, 2003, 7:34:18 PM, you wrote:
B> 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
B> 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".
B> 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
B> higher is still intact....for now at least.
B> ----- Original Message -----
B> From: "tradewynne" <tradewynne@xxxxxxxxx>
B> To: <realtraders@xxxxxxxxxxxxxxx>
B> Sent: Friday, December 05, 2003 5:34 PM
B> Subject: Re: [RT] The Market environment
>> --- In realtraders@xxxxxxxxxxxxxxx, "Bobh" <BHEISLER@xxxx> 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" <tradewynne@xxxx>
>> > To: <realtraders@xxxxxxxxxxxxxxx>
>> > Sent: Friday, December 05, 2003 2:35 PM
>> > Subject: Re: [RT] The Market environment
>> >
>> >
>> > > --- In realtraders@xxxxxxxxxxxxxxx, "Bobh" <BHEISLER@xxxx> 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" <tradewynne@xxxx>
>> > > > To: <realtraders@xxxxxxxxxxxxxxx>
>> > > > 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 realtraders@xxxxxxxxxxxxxxx, "Bobh" <BHEISLER@xxxx>
>> 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: 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: SLAWEKP@xxxx
>> > > > > > To: 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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