There is no such thing as a guaranteed bottom, but there is a high probability that we just confirmed a bottom...depending, of course, on the volume of hedge fund liquidations still to come
Thanks gautsid and thanks for your reply Bill. I read your December post regarding the VIX:VXV ratio, I just wanted to know if 1.10 was the arbitrary cut off to go long before, why is 1.51 the magic number now? Wouldn't this ratio have been indicating a buy for quite a while now? Couldn't it still go significantly higher?
Gotcha....thanks for pointing out the link. I saw you posted a chart of that ratio. I'm not sure where to find that, is there anyway you could post a more recent version of the same chart?
Regarding the VIX:VXV, as this indicator is still less than a year old (the VXV was launched last November), I continue to refine my thinking.
A level of 1.10 or above does generally provide a good entry point, but I believe that one or more confirmations can significantly improve usefulness the VIX:VXV ratio.
I hate to sound like a tease, but I am not going to share all of my thinking about the VIX:VXV ratio at this stage. (Some additional aspects of it will be in the newsletter and in the upcoming book.)
Sorry, one more question regarding your bottom call Bill. When you say bottom do you mean "the" bottom, intra-day bottom or 30 day bottom etc.? In other words, is there a time frame for the predictive capability of the VIX:VXV ratio?
Thanks.
By the way, I notice the indices are bouncing off their lows of today. Maybe your call was prescient.
I don't recall calling a bottom in September, though I did note on September 17-18 that some elements of a bottom were starting to line up.
Back then I suggested that we were at least several sessions away from a bottom and should wait until after options expiration before jumping to conclusions.
May I ask how you arrived at your call?
ReplyDeleteyeah, I'm with jughead...what is your rational?
ReplyDeleteA couple of factors, but prominent among them was the rate of change in the VIX:VXV ratio
ReplyDeleteJughead, click on the VIX:VXV tag at the bottom of the post to learn more.
ReplyDeleteThis has been a great indicator since I've started following this blog.
Thanks for all the updates you do during these interesting times.
Thanks gautsid and thanks for your reply Bill. I read your December post regarding the VIX:VXV ratio, I just wanted to know if 1.10 was the arbitrary cut off to go long before, why is 1.51 the magic number now? Wouldn't this ratio have been indicating a buy for quite a while now? Couldn't it still go significantly higher?
ReplyDeleteGotcha....thanks for pointing out the link. I saw you posted a chart of that ratio. I'm not sure where to find that, is there anyway you could post a more recent version of the same chart?
ReplyDeleteRegarding the VIX:VXV, as this indicator is still less than a year old (the VXV was launched last November), I continue to refine my thinking.
ReplyDeleteA level of 1.10 or above does generally provide a good entry point, but I believe that one or more confirmations can significantly improve usefulness the VIX:VXV ratio.
I hate to sound like a tease, but I am not going to share all of my thinking about the VIX:VXV ratio at this stage. (Some additional aspects of it will be in the newsletter and in the upcoming book.)
Cheers,
-Bill
Fair enough, thanks for your reply Bill. I'll keep a look out for your upcoming book.
ReplyDeleteSorry, one more question regarding your bottom call Bill. When you say bottom do you mean "the" bottom, intra-day bottom or 30 day bottom etc.? In other words, is there a time frame for the predictive capability of the VIX:VXV ratio?
ReplyDeleteThanks.
By the way, I notice the indices are bouncing off their lows of today. Maybe your call was prescient.
Regarding timing, I meant intra-day, at least 1-2 weeks going forward, and the strong possibility of a longer-term bottom as well.
ReplyDeleteThanks for the clarification Bill.
ReplyDeleteIn the VIX/VIV comment dated SEP 18, you say the VIX/VXV ratio was marking a good long entry point. Seems to me, that was a rather high bottom.
ReplyDeleteSept 18th was also the day before expiration. Could be some kind of "seasonal" effect at work here.
ReplyDeleteYes, I smell a canary, dead in a data mine. Can you explain the bottom you called in September versus the bottom you are calling now?
ReplyDeleteI don't recall calling a bottom in September, though I did note on September 17-18 that some elements of a bottom were starting to line up.
ReplyDeleteBack then I suggested that we were at least several sessions away from a bottom and should wait until after options expiration before jumping to conclusions.