Well lookie here. Another situation with the VIX and the PCR bottoming in unison. The last 5 times this has happened in 2009, the market reversed. See my post from last week for data around this. But there are two questions:
1. Will the reversal happen immediately or delay a day like last time?
2. How big is the reversal. The last time it was must smaller than the previous 4 times.
While the chart shows them bottoming in unison, we really don't know if they are a bottom yet. Both could move down again tomorrow while market rises. Wait for confirmation. Unfortunately, confirmation would be the VIX at 43, which may be halfway done with the reversal.
Would you buy vix calls if vix <40?
ReplyDeleteI already have some
ReplyDeleteI am waiting for 38-39 myself. Or possibly when we hit 850 on the SPX. 870s is looking increasingly distant.
ReplyDeleteIf you know it will go up to 45 and you are waiting/hoping for it to go down 1 or 2 pts more, why not buy half a load now?
ReplyDeletealso, historically, the VIX goes up on Mondays.
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_U/threadview?m=tm&bn=58157&tid=376191&mid=376191&tof=1&frt=1
ReplyDeleteThe Great Flaw of the Giethner plan