Comments on: 10 Year VIX versus SPX

By: cptiger

cptiger — Thu, 26 Jun 2008 07:53:54 +0000

ENRON Loophole should be closed as soon as possible.

By: John Doe

John Doe — Wed, 25 Jun 2008 19:53:10 +0000

Do you even know how the VIX is calculated? If you pull your zero IQ out of your rear-end, you’d relaize your thesis is true by definition. It’s basically like saying your should buy stocks everytime the market drops. duh.

By: Michael

Michael — Wed, 25 Jun 2008 11:02:40 +0000

Does anyone know how to generate a SPX vs VIX chart without a Bloomberg? Have played around with the charting options at several online sites and my brokerage accounts, but unable to create something with scales that allow this nice peaky comparison.

By: bob

bob — Tue, 24 Jun 2008 19:50:15 +0000

Since it’s a coincident correlation, why not a simpler rule, ignore VIX and just buy SPX when it spikes down. Same result, no? But then I suppose you don’t get to draw all those neat colored lines.

By: michange

michange — Tue, 24 Jun 2008 17:27:34 +0000

Barry, doesn’t the thread here show that there is a forum business opportunity for TBP?

By: Colin

Colin — Tue, 24 Jun 2008 16:56:24 +0000

The big point that you are missing here is that these tops are easy to pick in retrospect, but not quite as straightforward to pick at the time.

I bet in late 2000 when the VIX jumped to 40, people using this ‘technique’ were lining up to buy stocks, only to see the VIX blow out 20% further and the S&P drop 20%.

Makes for a pretty picture, and I actually agree that buying into fear is a good thing, but this graphic is pretty deceptive.

By: KnotRP

KnotRP — Tue, 24 Jun 2008 16:31:37 +0000

If oil prices are marginally driven by speculation (which may be true), producers could kill the speculation with excess delivery of product….i.e. drown the speculators in oil at high prices, knowing oil is fungible such that speculators would eventually have to return it to the market or use it in place of new purchases. If prices are too high, producers have every incentive to take the other side of a speculative bet (since they can produce more product). Yet it’s not happening….even at $130. This would imply that producers are unwilling or unable to ramp up production to capture excessive (speculative driven) profit. Does it fit that anyone would be *unwilling* to take profits from speculators (who are apparently also destroying the oil-based economy that oil producers rely on for profits and stability)? I think that leaves “unable” standing as the sole reason.

Speculators may simply be taking advantage of an inability to produce MORE oil. But isn’t this what pricing is supposed to do when supply is constrained?
Getting rid of speculators of a certain type only changes who will profit from the supply ceiling….it won’t remove the supply ceiling.

Get used to expensive oil, methinks.

By: daveNYC

daveNYC — Tue, 24 Jun 2008 15:47:57 +0000

So even though the market has shown that people are quite willing (though not happy) to pay $130+ a bbl, somehow driving out ‘parasites’ from the market will drop prices?

By: Retrogrouch

Retrogrouch — Tue, 24 Jun 2008 15:44:06 +0000

But in the past we probably had far less of the action due to the plunge protection team. With their secret purchases to prop things up, how can we know with any certainty what the market is really doing?

Is it possible to sort out the volumes of index purchases vs. actual stock purchases? I should think that would be a really interesting bit of info.

By: cinefoz

cinefoz — Tue, 24 Jun 2008 14:25:54 +0000

jh,

Well, lets kill off the parasites. If the price doesn’t change then you win everyone else on Earth loses. I personally find the idea that oil can double in price over a short time without any obvious shortage of products made from oil a smoking gun against the parasites. It appears that 100% of demand can be met if suckers are willing to pay the price. That’s not a shortage, it’s a gouging from the middlemen, not the producers. It’s kind of a worldwide intelligence test, and, for once, Congress is on the right side of it.