Chief Market Forecaster wrote:
agip wrote:...we[ve got some bullish conditions here -
....
Brilliant!
Nearly pegged the top for the day... then only crickets chirping. Dow down 111.97 for the day.
My guess: get ready for a brief Santa Claus rally to finish the year, then boom goes the dynamite as the bottom falls out of this market.
'nearly pegged the top for the day?"
what are you talking about? The Dow was up 200+ points at one point- that post was when the dow was flat. the market had already fallen 200 points.
but maybe you aren't that good with the subtleties of the english language.
When someoen says "some" and "usually" and "especially if this happens another day," those are called qualifiers , which are meant to moderate the statement and not make it so strong.
Here's the whole post:
"..we[ve got some bullish conditions here -
the vix is high, as discussed above, and small caps are strong. Small caps are up 0.8% while big stocks are flat or up a hair.
usually that is a sign of a bottom.
esp if it happens for more than one day."
the vix is still the highest it's been in 2 years other than October - oil and russia and the end of the year are too large for many managers to handle.
here's a little story on how to use the vix as a contrary indicator. It is just about the only thing that works, if inexactly.
http://finance.yahoo.com/blogs/talking-numbers/the-last-5-times-this-happened--stocks-rallied-hard-231526432.htmlincl: The CBOE Volatility Index (the “VIX”)—which is sometimes called the “fear index” because it tends to spike when the markets start to worry—is now trading above 20. While on the surface that would appear to be cause for alarm, it has in fact signaled a buying opportunity for stocks over the past year.
The last five times the VIX traded above 20, the average return on the S&P 500 one month later averaged about 5 percent.