eResearch Blog: Volatility Part 2
WEEKLY COMMENT for August 13, 2007
Last Thursday and Friday, Stephen Whiteside of The UpTrend.com, our contributing partner for technical analysis, in his eResearch-sponsored “Daily Market Outlook” talked at length about the volatility taking place in the markets.
He honed in on the “VIX”.
The VIX is the CBOE Volatility Index® (VIX®) and represents a primary indicator of market expectations of near-term volatility, as conveyed by option prices on the S&P 500 stock index. Introduced in 1993, the VIX is considered to be the market’s premier barometer of investor sentiment and market volatility.
The VIX is an excellent measure of fear in the marketplace, and the index is at four-year highs. However, in 2001-2003, the index was more than twice as high than it is now.
Typically, as the VIX rises, the market declines. But how high is “high”? Just because the index is well above its last four-year averages does not mean that it cannot go higher, and just because the market is low does not mean that it cannot go lower.
As we said last week, “Expect further volatility to come. The market needs to find a bottom and build a base before it can be expected to resume upwards. This will take some time.”
As an add-on, we are not likely at the bottom yet so, if you have cash to invest, keep your powder dry for now.
If you are interested in hearing Stephen’s presentations, click on the following link, or paste them into your browser: http://www.theuptrend.com/20070809/dailymarketoutlook20070809.html for last Thursday and http://www.theuptrend.com/20070810/dailymarketoutlook20070810.html for Friday.
We highly recommend a subscription to Stephen’s technical service. For further information, go to www.uptrend.com or e-mail Stephen at stephen@theuptrend.com.
For access to eResearch for reports and investment articles, go to www.eresearch.ca
Last Thursday and Friday, Stephen Whiteside of The UpTrend.com, our contributing partner for technical analysis, in his eResearch-sponsored “Daily Market Outlook” talked at length about the volatility taking place in the markets.
He honed in on the “VIX”.
The VIX is the CBOE Volatility Index® (VIX®) and represents a primary indicator of market expectations of near-term volatility, as conveyed by option prices on the S&P 500 stock index. Introduced in 1993, the VIX is considered to be the market’s premier barometer of investor sentiment and market volatility.
The VIX is an excellent measure of fear in the marketplace, and the index is at four-year highs. However, in 2001-2003, the index was more than twice as high than it is now.
Typically, as the VIX rises, the market declines. But how high is “high”? Just because the index is well above its last four-year averages does not mean that it cannot go higher, and just because the market is low does not mean that it cannot go lower.
As we said last week, “Expect further volatility to come. The market needs to find a bottom and build a base before it can be expected to resume upwards. This will take some time.”
As an add-on, we are not likely at the bottom yet so, if you have cash to invest, keep your powder dry for now.
If you are interested in hearing Stephen’s presentations, click on the following link, or paste them into your browser: http://www.theuptrend.com/20070809/dailymarketoutlook20070809.html for last Thursday and http://www.theuptrend.com/20070810/dailymarketoutlook20070810.html for Friday.
We highly recommend a subscription to Stephen’s technical service. For further information, go to www.uptrend.com or e-mail Stephen at stephen@theuptrend.com.
For access to eResearch for reports and investment articles, go to www.eresearch.ca
posted by Bob Weir at
4:52 PM
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