For my top secret calculations I am using VIX. from WIKI: The VIX is quoted in percentage points and translates, roughly, to the expected movement in the S&P 500 index over the next 30-day period, which is then annualized. http://en.wikipedia.org/wiki/VIX Right now SPY 117.33, VIX 39. So the expectations are that SPY will move up to +/-39% within a year with 68% likelihood. There is 32% likelihood that SPY will exceed this range. :eek: Rounded up targets are ~70 and ~165.
HA HA HA http://seekingalpha.com/article/257510-the-vix-calculating-expected-daily-price-changes One thing for sure is we are not going to be at todays price for long As far where we are in a year---that's why volatility is high. Not everyone can agree. Plus if a meteor hits the earth or another earthquake hits vix will change. It's like a carnival booth where you're trying to hit a moving target and it's zigging or zagging. More aptly it's like trying to shoot a bad guy who's shooting back at you. That's why safety is key and certain "precautions" are instituted by the pros. Like wearing kevlar, only going in with back-up. Having Plan A, B, and C. But yeah we're going to 1500 or not....
Ah the standard deviation. But there is, you know, no such thing as a deviation that's standard. An oxymoron if ever there was one. I voted for neither. We'll trash 1500, but not this year or next. Early 2013, around the inauguration or maybe a month or two after, and that would be regardless of which party wins, by the way. Businesses have money, that money will be spent, almost against their will, really, and as it's spent, the economy will move. Earnings already justify breaking 1500 given the level of earnings and the level of interest rates - close to zero nominally, below zero relative to inflation - so it's just a matter of time. All you need is a little emotion, and there'll be plenty of that in early 2013.
what book? VIX is at 39 and that's a fact. the formula for SPX expected range does not say anything about VIX change over time. VIX could go to 100 and then to 20 and not stay over 39 for a year.
That is true, but my point is that if you draw a line below 39 the future chart of VIX would go below it. It is a must, if no mistake is made in the derivations and risk free type of situations do not exit. (As for the book, if it is decided to be published, I would let you know).
VIX 42. Somebody is afraid of something for sure. Who are these people? What exactly are they afraid of? any chance that we will go through 2008 type scenario? i have hard time believing it.