Tell me a bedtime story
Vix extreme lows are a nuisance...
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interesting. so you think a volatile move down is coming for S&P? i was thinking of more room to the upside as we closed above some support levels near 1228. the vix correlation you highlighted is interesting though.Posted 12-16-2010 at 09:01 AM by Simit Patel
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Simit, unfortunately I haven't got a crystal ball... I also think SP500 rally could reach 1300/15 level, but there is this historical recurrence of downward retracements after vix extreme lows... Historical recurrences do not offer certainties, of course, they just suggest potentialities, they whisper in our ears... So I'm doubtful.
Ciao ciao
Posted 12-16-2010 at 04:06 PM by tradermax 
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Wow, this complements my bearish outlook for US equities! How did you create this chart? Looks like those smart fellas who betted on a slow decay in the VIX made huge money!Posted 12-17-2010 at 01:13 PM by forexer
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Forexer, stockcharts.com allows you to set up all the comparisons you want by means of the 'interactive chart' tool. But you made me curious... what is this story of the people who betted on a slow decay of the VIX?
Ciao ciao
p.s.: about silver, I got out too early, you were right... but what do you think is gonna happen now?Posted 12-18-2010 at 04:11 AM by tradermax
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Hey what is Ciao Ciao lol!
There were traders who did some option trades that profited most when the VIX went down slowly. Like when they structure such trades they allow the option premiums to decay on their short side while buying some cheap slightly OTM puts so they are long gamma that is near to the peak.
I'm quite blur at options still, Tommy and Tek on the site are great experts at them.
As for silver i have some money waiting to enter but silver looks like its forming a nice bull pennant with bars of decreasing spreads. But then that key reversal on the daily is like a fend off for longs, based on TA of course. Fundamentally its as bullish as before. Silver may fall but dude, when it fell 50 cents it got bidded up to almost unchanged. What if it falls $2? That would literally kill the shorts.Posted 12-18-2010 at 01:50 PM by forexer
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Also need to point out that the future curve for silver shows the market (even the bloody paper market) is freaking tight. The difference between the jan and may futures is a mere 7 cents or 0.24%. Not yet as a backwardation but this is super bullish!Posted 12-18-2010 at 01:57 PM by forexer
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Forexer, Thanks for the explanation about the vix traders. So silver is destined to get even higher, worse for me!!!!
Ciao ciao is bye bye in my mother-languagePosted 12-19-2010 at 05:11 PM by tradermax
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