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Educational

Almost every month, some subset of the class of investors and journalists expresses extreme alarm when the VIX magically plummets on the Monday before the standard monthly options expiration that occurs on the third Friday of every month. I have written about this before, notably in: How Can the VIX Be 14 and Lower than VIN and VIF? VIN, VIF…

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[The following first appeared in the August 2011 edition of Expiring Monthly: The Option Traders Journal. I thought I would share it because it might help some readers put the current fiscal cliff crisis in historical context.] The events of the last three weeks are a reminder that financial crises and stock market volatility can appear almost instantaneously and mushroom…

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Many novice and advanced VIX followers are scratching their heads today, wondering why the VIX is down more than 5%, hovering around the 14.00 level, when the SPX is down 0.4% and all the major market averages are deeply in the red. More serious students of the VIX will also note that this drop in the VIX comes on a…

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The SP500 has stalled at the median line for the rally for the second time since the rally began in November.  Short-term momentum is rolling over with short-term sentiment at extreme bullish readings.  It seems a pullback is likely, but there is support at the October high and at the lower trendline.  
I suspect the pullback will terminate in this…

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There is no evidence other than extreme sentiment readings that an end to the rally is near.  Momentum remains positive, and AAPL’s results will only help tomorrow.  It looks like the Qs could very well reach the next target zone around 63+/- before a top is seen, which could take another 2 to 4 weeks.  This is consistent with the…

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Sentiment as measured by the equities only put/call ratio has reached an extreme.  This doesn’t mean that a top will follow immediately.  A decline could start tomorrow or in 2 to 4 weeks.  However, prudence dictates that it’s time to take some profits.  I would be willing to leave some long positions on if they are working, but it’s time …

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VIX Views

by Bill Luby on January 19, 2012

in Educational, Stocks

Yesterday, I learned that the people at S&P 500 Indices and the CBOE have collaborated on a new blog with the name of VIX Views. The best news about VIX Views is the high quality of contributors and content. The most recent posts, all of which have appeared since January 7, include the following: Matt Moran (CBOE) – Why Are…

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It’s time for the various viewpoints to put up or shut up.  The SP500 closed solidly above resistance today while the Qs are only 34c away from an 11 year high.  The squeeze long signals that triggered two weeks ago show no signs of weakness.  However, the High Low Logic index is flashing a warning sign as it has turned…

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A wise man proportions his belief to the evidence. ~ David Hume ~ Earnings season is now upon us and so far the only major earnings component that has been released is the J.P. Morgan earnings report that came in Friday before the market opened. After the report was digested by the marketplace, prices fell dramatically. While the charlatans in…

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Tom McClellan and the Ratio-Adjusted Summation Index Tom McClellan has written an article in support of the continuation of the rally which has technical significance. He suggests that the current move in the ratio-adjusted summation index above +500 indicates that the rally will continue, and that the top of the rally will probably occur with a lower high in the…

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One week ago marked five years since my first post at VIX and More. Since this anniversary fell just after my Top Posts of 2011 entry, it seemed like another retrospective look at the blog might be one too many. After a week of reflection I am now convinced that The 1000th Post is probably best left unchallenged (for now…

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Based on some of the questions and comments that came out of Wednesday’s Three New Risk Control ETFs from Direxion, there appears to be a significant portion of the investment community that is uncertain about just how some ETPs are attempting to dampen volatility and control risk. Today I am going to differentiate between three types of risk control approaches…

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