Sunday, October 5, 2008

Barring Any FED Rate Cut Or Major PPT Maneuvering....



....I expect the indexes to meltdown this week. VIX should spike into the 50s as panic rips the tape to pieces. Financials looks poised to breakdown from this nasty looking triangle. The markets are not happy right now, it's as simple as that.

11 comments:

Bubs said...

There is no reason to buy stocks, short or long term.

HPT said...

the VIX looks like a bull flag, probably going to spike to 55 as we crash next week.

Stewie said...

i have been coming into the mrkts everyday expecting to short. going long is not even in my vocabulary right now. nice to see ya again bubs.

Stewie said...

HPT. yea. why does it feel like even with VIX in the mid 40s, still feels like many people are calling for a rally. that's scary to me bro.

Lore said...

I am overall negative, however I think VIX at 45+ is just panic. Can it go higher? of course it can. Will it revert to 25-30? most likely I think, it's just a matter of timing. Long (illiquid) OTM VIX puts

Stewie said...

lore: check out the front page of bloomberg.com and tell me if you want to be short the VIX puts? bad news is spreading on a global scale bro.

lelio said...

its almost never paid off to short the market or go long the vix with the vix this high. then again, we could crash.

Stewie said...

keep your trades intra day and wouldn't have to worry about that. going long just because the VIX is at 40 is suicidal. spikes to 50-60 and you are toast.

Gio said...

Hey stew... I'm in the Vix back to high 30s camp, only because the volume should come in light for a few days, and the Vix actually went down Friday while the Dow swung almost 500 points.

... unless we get another big bank failure hit the news, then 50+ easy.

but anyway, I agree its better to trade the intraday swings.

aloha!
-gio-

Anonymous said...

hey stewie, according to the stock traders almanac, october has a long history of bottoming and /or setting a sharp trading low.the years included were:1946,1957,1960,1962,1966,1974,1987,1990,1998,2001 and 2002. so i guess we should watch this month to see if we add 2008 to the list.And trade it accordingly.
Bill

Stewie said...

Hi bill: i agree with you about OCTOBER being a 'bottom' month. most major bottoms have come in Oct. I am expecting fear to really come in hard next few days and you know we have bottomed when fear is turning folks insane, we selloff hard and then reverse back and rally twice as hard and set in huge volume hammer reversals.

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