Replies to post #41750 on Short Term Trading Member Forum

[PriceTeam]

Reports of key reversals are greatly exaggerated. The VIX remains in a significant down trend. Several analysts have anticipated a pullback here. This pullback will likely produce a back test of the VIX breakdown below blue line (25ish)--and perhaps even a test of the upper down-sloping trend line (27ish). It would take a move far more violent to produce any kind of sustainable reversal in the VIX.

For a historical perspective on how insignificant today's move is, see the second chart, and pay particular attention to the VIX performance during 2003 and 2004. Until further notice, I will anticipate a similar years-long down-trend in the VIX, and there is a real possibility of seeing it in the mid-teens by Spring 2010.

Would love to see a key reversal because that kind of volatility can pay traders well. I do not expect it whatsoever but will welcome it if we see it. So far, no dice.

GL to all!

Ted


charts courtesy of stockcharts.com
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[skidstreet]

I noticed that and bought VXX. Should get a decent bounce here. Notice the indicators turning up and the big volume spike on the reversal.

http://stockcharts.com/h-sc/ui?s=VXX&p=D&yr=0&mn=3&dy=0&id=p21955324812

[skidstreet]

Good call. The VIX has exploded since that key reversal day.