Investors....come in please!

[Drew99GT]

"The bottom line is, without expressing opinion, the facts of the option market reflect that the VIX itself is at multi- year lows and the probability that the VIX moves away fromthese levels is at its lowest level in multiple years. Taken a step further, the forward looking option market reflects that the risk of a change in VIX is even lower."

"It’s not my place to question the “market” but ask yourself this: “Does the S&P 500 have less risk now than it has at any point in the last two-years and even if so, is the probability of that low risk maintaining its current level higher than it has been at any point in the last two years?”"

http://livevol.blogspot.com/2013/01/vix-at-multi-year-lows-probability-of.html

Is this the start of some kind of blow off top, or the real start of an emerging new bull market/end to the cyclical bear that started in 2000? It could all blow up in an instant, but the Rhinos have declared they're kicking the debt ceiling can for 3 more months, Europe risk, although it's in an employment depression, has faded, etc. The Vix had a solid support trendline for several years and today it plummeted through it.

 

[Tempest]

How accurate is the VIX?

 

[Drew99GT]

Originally Posted By: Tempest
How accurate is the VIX?


It measures the difference between call vs put options prices on the SP500, so if people are buying puts like crazy (the vix goes up), it generally indicates people expect the market to drop or become very volatile. In general, a super low vix implies complacency/and or a market that's nearing a top, and a super high vix implies utmost fear and a bottom, but the vix has stayed very low for long periods of time when the market really soared. From mid 2006 to the top in 2007, the vix bottomed out and the market went parabolic before it cracked. Same thing through all of the 1990s.

 

[Turk]

Blow-off Top, or Down We Go?

You pick.

 

[JHZR2]

I picked up some AXAS, and my LINE did well today. Wondering, as Id like to pick up some AT and PBI, but they were both up nicely today. I either missed my chance friday (prices were just slightly above my desired entry point) or will have my chance in a week...

 

[Turk]

I actually sold my big profit in LINE today as I do have a lot of more (same as LINE) tax friendly LNCO.

 

[Drew99GT]

Originally Posted By: JHZR2
I either missed my chance friday (prices were just slightly above my desired entry point) or will have my chance in a week...


I feel the same about WFT. That chart is a thing of beauty IMO. the low it made in November was support that was there for years before the 2007 financial crisis, plus it broke out of all downward sloping resistance trendlines but one. If the market gets a good pullback on that remaining resistance line, I'll probably buy some.

 

[friendly_jacek]

The super low VIX spooked me too. Not just that. While the markets are not as overbought as they can be sometimes, the total disregard to Europe's recession and slowing China is mind boggling. I don't see how US can do it alone, especially with higher taxes and higher gas prices again.

NAAIM survey is over 80%, high risk for decline or crash. I'm starting to take short positions again. Last time I did that was Sept-Oct 2012.

I haven't decided what to with gold/silver miners. They are very good value compared to metals, but could go down if we have indiscriminate selling.

 

[JHZR2]

Originally Posted By: Drew99GT
Originally Posted By: JHZR2
I either missed my chance friday (prices were just slightly above my desired entry point) or will have my chance in a week...


I feel the same about WFT. That chart is a thing of beauty IMO. the low it made in November was support that was there for years before the 2007 financial crisis, plus it broke out of all downward sloping resistance trendlines but one. If the market gets a good pullback on that remaining resistance line, I'll probably buy some.


I agree. I've traded wft very successfully for the last year and am looking for a pullback to stock up.

 

[Warstud]

Something to ponder: Investor’s Intelligence tally of bulls currently resides at 53.2%, the highest reading since September 19th of last year, when bulls were a mere one percent higher. From that point, the Dow proceeded to shed 1007 points in the next eight weeks. From the print high on September 14th to the print low, the damage was 1182 points (8.7%). To boot, bears are the lowest they have been since last May at 22.3%.

 

[JHZR2]

Oh there will definitely be some correction here... But IMO it is an entry point in some things. No all things.

 

[friendly_jacek]

I looked at the charts again and last time we had such low VIX was May 2007, before the financial storm and at the peak of the bubble.
Hmmmm!

Another indicator that gives me a huge pause is FXA:FXY, highest since 2008. If this is not some kind of top, I don't know what it is.

 

[friendly_jacek]

Check this:

Quote:
Hulbert newsletter writers recommend an 81% net long exposure, highest since July 2000, next highest December 2004/May 2010.


from: http://marketmontage.com/2013/01/23/tom-demark-target-hit-at-sp-1492-apple-on-deck

 

[Drew99GT]

Originally Posted By: friendly_jacek
I looked at the charts again and last time we had such low VIX was May 2007, before the financial storm and at the peak of the bubble.
Hmmmm!



That point in 2007 was when the vix was starting an uptrend though. The correlation now compared to pre financial crisis IMO, is in about 2006 when the vix was coming off the tech bubble highs and downward sloping. That I think is where we are today. I don't doubt a healthy pull back will occur in the coming weeks/months, but if we're at the point where the market was in 2006, it will be more catalyst for further upside in 2013. Most markets are breaking out of very long term resistance, to the upside. The most prominent being the Russel 2000, which is currently leading the indexes higher.

 

[Drew99GT]

Originally Posted By: friendly_jacek


Another indicator that gives me a huge pause is FXA:FXY, highest since 2008. If this is not some kind of top, I don't know what it is.


Kimble charting solutions has noted that, at least the correlation between the Yen and US markets. It's a perfect 100% correlation! FXY:SPY is one to monitor; when the yen starts outperforming the SP500, it will mean an intermediate term top for stocks.

http://blog.kimblechartingsolutions.com/...cline-in-price/

 

[friendly_jacek]

yap, I do remember how yen was falling non-stop prior to 2007. I even went long mid year and got some profits when it spiked, but failed to ride it up all the way. It certainly feels similar today.

 

[Drew99GT]

Apple is getting hammered currently. I find this chart pretty fascinating: it has one more support trendline to go before potential freefall (more then it already has).

http://blog.kimblechartingsolutions.com/...n-who-will-win/

 

[Turk]

Originally Posted By: Drew99GT
Apple is getting hammered currently. I find this chart pretty fascinating: it has one more support trendline to go before potential freefall (more then it already has).

http://blog.kimblechartingsolutions.com/...n-who-will-win/




Yep - no way on earth I was going to buy it, even though lots of pros were saying it's been a buy.

 

[JHZR2]

The money was made when it was at $5, not $500.

I often find the analysis and subequent movements a bit ridiculous.

 

[Mr Nice]

JHZR2,

What % of your total investments are in stocks ?