Friday, February 16, 2007

Around the Horn

Martin Goldberg has a comprehensive review of the VIX on Financial Sense in which he uses a variety of charts to support his claim that the VIX looks like a coiled spring that is ready to jump. He argues that the markets will have difficulty going higher if the VIX does not continue lower, suggests that volatility is bottoming, and reminds us that “fear cannot go bankrupt.”

Brett Steenbarger at TraderFeed has an interesting look at absolute and relative option volatility, with links back to much of his previous VIX research. He also concludes that a market pullback is likely and bases this assessment on the current lows in both absolute and relative option volatility.

Ron Sen at Technically Speaking points to the high SPX/VIX ratio as a warning sign of “enhanced risk” in the markets.

Glenn at the Wednesday Update blog suggests buying VIX calls in the current environment.

Of course, this may just be more linking of arms and minds in that human wall of worry. So says Zen’s Market Insights, Mark Hulbert and many others.

4 comments:

NO DooDahs said...

I tend to thumb through archives and see if the website authors were telling me to "sell" when great buying opportunities like Mar 2003, Aug 2004, Apr 2005, Oct 2005, or Aug 2006 were presenting themselves. It was certainly a very productive read for at least one author on your list.

;-)

NO DooDahs said...

Make that TWO authors on your list.

Bill Luby said...

I'm glad someone got some use out of the extra link I provided :)

The bears are very good at calling tops too early, but their undoing is that they too often fail to acknowledge a rally once it is underway.

Bill Luby said...

For Bill and others who may be interested, the CXO Advisory Group does an excellent job of grading the success of the predictions of various market 'gurus' at http://www.cxoadvisory.com/gurus/Default.asp

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