VIX Consistently above 40 during September

Discussion in 'Trading' started by aphexcoil, Sep 28, 2002.

  1. The volatility index has been running high during the month of September. On July 24'th, 2002, the VIX hit a high of around 56-57.

    It would appear it is again on the rise. Doesn't VIX normally max out when a reversal of trend is in the future?

    Also, the last time VIX was this high, it was September 21, 2001 (right after the terrorist attacks).

    It would appear the market is about to climax shortly.
  2. four out of the past five years(including this year) the VIX bottomed in the third week of AUgust(one week prior to Labor Day) and peaked at various times, but on two occassions, in the second week of October(typically during Oct options expiration). In 1997, VIX spiked on Oct 27-28th during the Niederhoffer debacle. In 1998, FOMC did a surprise rate cut on Oct 15th, 10 minutes after the bonds closed and 1 day before options expiration. That was the bottom. In 1999, market also put in a bottom during second week of October.

    I dont think its completely unexpected that the FOMC is going to probably launch another one of those surprise rate cuts. After all, this past week they even said they would if the market conditions warrant it. This is pretty much giving us all a heads up that one of those 12:30 missiles will be launching on the sp futures pad.
  3. I haven't seen the effects of a FED rate-cut on the ES movements yet. What kind of point movement occurs on an unexpected FED action such as a rate-cut?

    I'm assuming I wouldn't want to be on the wrong side of the fence when it occured, either.
  4. Winston


    Would somebody post a definition of the VIX and how to read it. Is it similar to the naz trinq, below .7 buyers in control above 1.2 sellers in control? Thanks.
  5. I am a bear longer term because I believe that the economy effects the stock market ( i'm not a pure technician ) but I think we are well oversold and overextended down right now. A massive spike up could happen at any time.
  6. Any spike is good for me...
    I wanted to play the fake on Friday late afternoon, went long Es, and didn't execute the stp loss, and now am holding a losing postition thru' the week end ! :(
    I bought some fruits, incense sticks and knee pads to pray for some or all gods today.
    The deamon inside me is still lurking... strike out at the moments least expected !!! :mad:

    Cheers !!! :(
  7. Doji,

    Would you feel better if I predicted a great melt-down on Monday?
  8. Winston


    Appreciate it.
  9. We're gonna fly on monday b/c of the end of quarter markup. I covered all my shorts on the close. I think that after that, we start to go quite a bit lower again. Looking at the vix, it's quite amazing that we couldn't make a new high for the month even on a -300 day. That shows you that the fear just isn't that great yet. I wouldn't really expect to get too long until we get over 50. We have a lot more movement down, but I think that around 45 or so, you don't want to be short any more.
    #10     Sep 28, 2002