Monday, May 4, 2009

RESPONSE TO QUERY ON VIX

A question was raised about the VIX model and the current reading on the VIX.  In its present form, the Model says the fall in the VIX from unprecedented levels to the current quote is a positive, whereas a rise out of a Stable VIX Pattern to the current level would be a Trigger event, mandating a shift out of stocks. The fall in the VIX is showing movement toward stability, and people need stability.  It is not yet stable as defined in the model.  

RB wants me to link the one year Vix Chart.  Yahoo! Finance  It just said again, "it is not about where you have been but where you are going"  LB said that we are in an Unstable VIX Pattern that has yet to resolve itself into a Stable Vix Pattern, consistent with the emergence of a long term investable bull market.  But readers of this post notice an ongoing war here at the trading desk regarding the trading rules of an Unstable Vix Pattern with RB seizing the  controls for three weeks back in March.  

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