Sunday, April 22, 2007

VWSI at +1; More Gewurztraminer Ideas

For the second week in a row, the VIX notched its lowest weekly close since 2/27, ending the week at 12.07, down slightly from a close of 12.20 the previous week.

The lack of movement in the VIX has dropped the bullish bias in the VIX Weekly Sentiment Indicator (VWSI) from a +3 level last week to the current reading of +1. At this stage of the game, it would take a sub-11 reading in the coming week for me to see a risk/reward profile favorable enough to consider opening a long position in the VIX.

(Note that in the above temperature gauge, the "bullish" and "bearish" labels apply to the VIX, not to the broader markets, which are usually negatively correlated with the VIX.)

Wine pairing: Last month I talked about two dry gewurztraminers from California as the perfect pairing for a VWSI of +1. I would be remiss if I didn’t praise the Old World ancestors of California gewurztraminer, the elegant Alsatian gewurztraminer. Unfortunately, Alsatian gewurztraminer is not distributed as widely as the quality of the wine warrants, so you probably won’t have many options at your local wine store. I would suggest you remember three names: Trimbach, the most widely distributed; Hugel, another winery with strong distribution; and Domaine Weinbach, a winery whose profile seems to be on the rise, and with good reason, based upon several stunning wines I have enjoyed in the past year or two. All three producers are excellent choices for gewurztraminer, riesling, pinot blanc, and pinot gris. To get a better sense of these wineries and the wines of the region, check out some reports by Lettie Teague and Robert Whitley.


Anonymous said...

Much appreciated post on the wine (and the vix stuff too). If you haven't, I'd highly recommend a trip to Alsace. Great wine, great food, beautiful towns, and fewer tourists than other areas.

Trading Goddess said...

I am really impressed with your market experience, as well as the vino knowledge.

Keep up the great work over here!


Bill Luby said...

Thanks to both of you for your kind words.

Anonymous, I haven't visited there yet, but I'm sure to make it to Alsace sometime in the next few years.

TG, I'm beginning to think that good wine makes for good investing, but I fear I may have the causation all bassackward...

Anonymous said...

Setzen, sechs!

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