Should traggedies strike when VIX is low?

Discussion in 'Trading' started by NoMoreOptions, Jan 23, 2004.

  1. Terrorists, wars, or natural disasters? What is gonna happen then? I am sorry it is not sound a pleasant question. But I don't mean to imply or hope anything wrong to capitalize on. Just ask from the point of view of pure possibility. What do you think?
  2. noddyboy


    Natural disasters are hard to predict though some people have their own models and try to profit from their prediction through futures.

    Terrorists--I am sure they will be "insider trading". Boeing gapped down 2 days before sept 11th. In that case, I think the VIX would rise before the event.

    Just my take. It could be that bin laden has no more money to speculate, but I doubt it.

    BTW, my teacher told me that according to British law, Bin Laden selling is not insider trading. Interesting huh? Meanwhile they get Martha Steward.
  3. Go back to 1993 and 1994 and you will see that the VIX had a much lower range, in which the low was around 9

    And for what it's worth, I don't believe we had any "tragedies" during that time period.
  4. MRWSM


    Absolutely not!!! From what I have seen major disasters/financial disasters only happen in a market that is already heading down.





    So in my opinion we are safe for now, maybe a positive surprise like catching Bin Ladin.
  5. DK_


    Will we see new post 9/11 highs?
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  6. lrm21

    lrm21 the long term the trend is up:cool:

    Regarding the VIX. Everything I've read and what I have personally seen the VIX in it of itself is useless as a sole indicator you need to put in context with market direction, volume, short and long term trends and correlate it with other indicators RS/MACD/BOP/Stoch/MA/XPMA/Astrology/Whatever floats your boat.

    Just because the VIX is low and some nuts decide to take a pot shot at the U.S. doesn't instantly spell Depression.

    Besides you should never be in so deep that if 10 sigma happens you would blow out. That's what hedging is for. Whether you hedge in cash, insurance, gold, whatever. All you can do is hedge.

    Someone once said that in Bear Market bad news take the market lower and good news takes the market lower and in a bull market good news takes the market higher and bad news takes the market higher. In short trade the trend.