Market Indicators - Investor Sentiment
- Rande
- 2win
- JenL_2
- Roger_Babson
- Rande
- Rande
- BillR_5
- JenL_2
- BillR_5
- SteveT
This archived discussion is "read only".
For the corresponding "live" discussions, post in the active topic forum here.
« Previous 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 Next »
» 2win - CBOE VIX Chart in Barrons
The Barrons Oct 23 issue (page MW79) has an interesting VIX chart, covering the last 60 days. Could one of our local chartists produce a similar chart, superimposing the major indexes--Nasdaq, Dow, etc?It might help me understand the correlation.
Thanks.
-- posted by 2win
» JenL_2 - Re: CBOE VIX Chart in Barrons
In response to message posted by 2win:2win - Here's the 10/23 Barron's article that you mention:
Whether you're bull or bear, it's rising
By Erin E. Arvedlund
(excerpts)
Back in the spring, this column detailed some strategies for trading rich options ("Costly Calls," May 8). In April, fear in the marketplace was palpable. The Chicago Board Options Exchange's Volatility Index, the VIX, topped out at just over 40 back then, well above the traditional 15-25 range, but not panic levels. Then, over the summer, the VIX fell back to around 20. Currently, the VIX hovers around 30, a sign that the market could be bracing for a triple-witch of elections, earnings and oil-price uncertainties.
<img src="http://www.geocities.com/jeninvestor/vol..." width=220 height=250>
Whether you're bullish or bearish on the stock market, looking to hedge or to use options as a stock substitute, know that the price of protection or speculation is higher than it has been in some time.
For now, Sandelman advises using overwrite strategies, particularly if your focus is on stocks that qualify as "fallen angels." In that case, writing, or selling options, against stock you own can help to pad your returns, he says.
If you're wildly bearish, and think the market will yet again sink deeper and faster, then use that volatility to your advantage. Buy combinations and/or straddles on market indexes such as the Nasdaq 100, the S&P 500 or even the Russell 2000. Options on the Nasdaq 100 unit trust, the QQQ, trade on the American Stock Exchange. The Amex this month also began trading options on Barclays Global Investors iShares, an exchange-traded-fund based on the Russell 1000 Index Fund, symbol IWB. (In a straddle, you buy or sell an equal number of puts and calls having exactly the same terms, such as strike price and expiration; a combination is any other puts and calls that aren't a straddle).
If mildly bullish, then sell far-out-of-the-money calls. If very bullish, then buy stocks and in-the-money options, which demand you pay out less premium.
What if you're neutral on the market? Then it's a good time to be writing options, particularly call options, against stocks you like in your portfolio. And if wildly bearish, "you can always just sell your stock," Sandelman adds, and return to something less worrisome -- like the World Series......
Subscribe to WSJ & Barron's Online @ http://www.wsj.com
Or just DCA come what may and donworryaboutit!......Jen
-- posted by JenL_2
» Roger_Babson - Re: Re: CBOE VIX Chart in Barrons
In response to message posted by JenL_2:Jen, Kirk, et al.,
I have mentioned the VIX numerous times on my thread in the past week or more. In a confirmed downtrend, such as the one we are in, the VIX peaks with a capitulation selling event (climax, if you will). So far, we have not exceeded the March-May pattern which marked the springtime capitulation selling. That the market technicals are weaker now than they were in the spring, and the technical indicators confirm that a longer-term downtrend is in place, the VIX strongly suggests that the current downtrend has yet to resolve itself. And the VIX indicator is likely to exceed the reading of last spring perhaps by a wide margin.
That the VIX indicator is rising on a daily, weekly, and monthly basis suggests increased volatility in the days, weeks, and months ahead with violent whipsawing as part of a generalized downward trend.
On a very short-term basis, that is, on a daily basis, the indicator has reached minor resistance, suggesting sideways action in the major indices for a short period (perhaps only a day or two) before the downward trend reasserts itself and volatility again begins to rise. In this context, a seasonal countertrend rally would not be anomalous and even expected once the major indices reach short-term technically oversold.
However, the weekly VIX is in a solid uptrend, whereas the monthly VIX has broken out to the upside with apparently strong momentum from a benign trend going all the way back to late 1997, suggesting that volatility during the downdraft could be rather dramatic in the months ahead; this would be perfectly consistent with the unfolding of a genuine bear market with volatility picking up sharply with each successive rally and decline in the now-confirmed longer-term downtrend.
BTW, the monthly VIX stochastic reading is nowhere near the reading registerd in the fall of 1998 selling climax. With today's market technicals weaker than in the fall of 1998, the likelihood is that the monthly VIX stochastic indicator will equal or surpass the reading of 1998, which again suggests a great deal more volatility and lower prices ahead.
Good luck.
-- posted by Roger_Babson
» Rande - In an excerpt of his newsletter published in this week's Barron
In an excerpt of his newsletter published in this week's Barron's, Granville maintains that contrary technical indicators such as the put/call ratio are misleading in a bear market since the put buyers are right. Head spinning? Don't blame you. This kind of "voodoo investing" tends to leave its followers with the feeling that there's a doll out there somewhere, made in their image, with someone sticking pins into the head when things don't go according to plan.BTW -- bull/bear ratio at 57.5% in last weeks II Survey.
-- posted by Rande
» Rande - Mutual fund cash levels rose 9.
Mutual fund cash levels rose 9.4% in Sept.Ready Money? Funds' Cash Levels Rose 9.4% in September
U.S. stock fund managers' cash stakes jumped 9.4% from the end of August to the end of September, according to liquidity tracker TrimTabs.com. Over the past two years, that's been a clear sign that the stock market is about to climb. For the past few weeks, fund industry observers and insiders have hinted that funds' cash positions were building up as managers practiced tax-loss selling-dumping losing positions to reduce their taxable capital gains distributions to investors. Now those rumors are confirmed. At the conclusion of the TrimTabs.com report, the firm weighs in on what this information might mean: "Does [this] mean the stock market has bottomed here? In our opinion, yes." Of course, there's more to the market than liquidity levels. But this is clearly an intriguing nugget of information that the market tracks closely. At the end of August, cash made up less than 4.5% of U.S. stock funds' assets, but by the end of September that figure rose to 5.1% -- funds' highest cash position since November 1998, according to the report, which is dated Nov. 1. Over the last two years whenever funds' cash stakes have jumped more than 6% in one month the market has headed north over the next 90 days, according to TrimTabs.com. For fund investors, this means that their manager might be keeping more money than usual on the sidelines in a tough market, and may be set to put it to work before year-end. For stock investors, this may indicate bonny days ahead. Following managers' cumulative portfolio moves is seen as a solid market indicator because the billions of dollars behind these percentages can move the market in a hurry. Consider that at the end of September U.S. stock funds had more than $190 billion in cash-a figure that rose by more than $16 billion during a month when the Nasdaq Composite dropped 12.7% and the S&P 500 fell 5.3%, according to Baseline. A high cash position in funds is a classic contrarian indicator. It's generally good news for the stock market because once managers invest just a bit of the money, they can push stock prices higher. On the flip side, a low cash position in funds can point to a market top. Consider that the lowest cash stake for funds over the last 30 years, 3.9%, came in March 2000 when stocks peaked and fell precipitously. The idea being that funds hadn't much more money to invest making it tough for stock prices to rise.
-- posted by Rande
» SteveT - I brought this thread up hoping to revive it.
I brought this thread up hoping to revive it. If I can get the II data would be glad to do the math and post it (we got that part covered right Jen).In a search of the Web I found this site which tracks several web sites that survey people like you and me. Thought it might be interesting to compare us with the pros.
http://www.websentiment.com/
Currently they are at
44% bears
33% bears
23% correction
That translates into bulls/bulls+bears= 57.14%.
Money on the sidelines waiting to come in bears+ correction= 56%.
-- posted by SteveT
« Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 Next »
Please follow the guidelines set forth in the Suite101 Posting Etiquette when adding to the discussion.