ayla Account Talk

[ayla]

just went 100% F - after not getting the G penny.

I definitely feel like a monkey right now, an unlucky one but I HATE being in the G fund more than I hate the F fund.

Not seeing a very good place to buy back into I or S funds today. I'm thinking things may be down not just today but also on Monday. Will re-evaluate then. - The ISM report coming in so low at least according to Yahoo editorial seems like a big deal.

I still don't think a general overall pullback is in the immediate future because of my VIX 200 day average theory. VIX needs to get to over 13 to make its 200 day average right now and it is only at 11.7. Doesn't move that quickly (at least it hasn't in the past even during the May pullback timeframe.)

 

[ayla]

VIX is down 3% which tells me that the market is still fending off a major downturn at least for now IIMO.

I just went 100% I. Would have rather gone to 100% S but S is too high right now. I'm hoping to do one of those flip flops with I fund this week on a good day. Though it wouldn't surprise me if S keeps going up with no place to buy in. May regret buying I rather than S today but I think I would regret it more if I stayed in F right now.

Wish I would have followed my new strategy which says to stay in the market unless VIX is above 200 day average. I wouldn't be in this boat right now. Oh well.

 

[fedgolfer]

the VIX is fast approaching the 200 DMA. Thoughts on the next month? It may crossover convincingly, or, it may flirt with it, then December seasonality could make it head back down and test the 10 range, putting in a double bottom.

 

[ayla]

Yes the VIX is up 11% which is a lot. You are right to use the word "flirting". Looks like in the past, the VIX makes a little jump up and then back down for at least one time before it makes its final assault up the peak (during the time you want to be out of the C, S or I funds).

That final pull back of the VIX after the brief flirtation can bring about a significant breakout. I'm definitely still new at this, we may already have had this breakout but I'm staying in for a few days more almost for sure. I'll have to check the data further to make sure.

Timing is VERY critical I just learned today from what I can tell looking at the charts. The better you can predict the exact point at which the VIX is about to cross over the 200 SMA, (and not a day later or after), the better off you are pulling out in a timely fashion.

Previous estimates I have given for great gains if using the VIX 200 day crossover strategy should be considered incorrect because they didn't take into account the delay we have before the IFT becomes effective. (Besides the important fact that in some of my posts, I used the wrong interval of time for the IFUND prices.) Still looking at this.

Over a years time, looks like this little one day delay can make a HUGE difference to the downside if using only the VIX as your guide.

I still am convinced it is a very good indicator to watch for the trend. I just wish I could get it to tell me EXACTLY when to buy and sell, LOL.

 

[Birchtree]

http://www.safehaven.com/article-6468.htm

 

[fabijo]

http://www.safehaven.com/article-6468.htm

Now what in the world?? Why is there always some new type of indicator? I've never heard of a concentric circle pattern. The learning never stops.

 

[Pilgrim]

http://www.safehaven.com/article-6468.htm

From the above:

"If the Fed does not significantly increase M3 in the next few days, market risks will rise substantially."

How do we monitor "M3" and how much of an increase is substantial?

 

[dell]

Someone please correct me if I am wrong, but I believe I read where the Fed intends to make it difficult if not impossible to monitor M-3.

Dell

 

[ayla]

Someone please correct me if I am wrong, but I believe I read where the Fed intends to make it difficult if not impossible to monitor M-3.

Dell

Yes, I've heard the same thing. Something happened this past March that let the FEDs off the hook as far as reporting how many dollars they were printing from what I understand. (Bush signed another law that allows government to operate in secret IMO.)

Just did a google search and came up with some hits that indicate some resourceful people are still managing to figure things out (but not exactly):
http://bigpicture.typepad.com/comments/2006/11/the_return_of_m.html
http://www.nowandfutures.com/articles/20060426M3b,_repos_&_Fed_watching.html

When I asked an investment broker this same question, he told me to look in Barron's on the page headed with MARKET LABORATORY ECONOMIC INDICATORS. He said there will be information about the money supply.

I haven't done this yet. I figure I already know the answer. They are printing like there is no tomorrow, I think.

If anyone has more information about monitoring realtime on the web, I'd be very interested. Might give us more clues about I fund performance in particular, don't ya think? (I'm just guessing here...)

 

[ayla]

Moved to 100% F by cob today. I will probably buy into S fund tomorrow because I'm expecting a down day tomorrow. News may change all that.

Other option is of course to buy back into I fund tomorrow but I'm getting a little tired of the volatility of the I fund - seems S fund is a little more predictable and still gives about same results especially if you want to buy and hold.

^VIX is down 6% as I write this which is a lot. A low ^VIX often (though not always) means it will be back up tomorrow and when the VIX is up, it usually means the US market will be down. That's when I hope to buy back in, tomorrow or maybe day after.

There is not aways such a correlation with VIX and the market but seems since VIX is forming peaks like it does when the Market has a periodic (4-5 month) downturn (either small or large), the correlation between VIX up and US Market down is a little more predictable. We'll see.

Though it seems that news mostly drives the F fund, main reason I'm "parking" in the F fund is that the %k fast stochastic is looking very over sold so maybe that is a good omen. (Though I rarely have good luck with the F - rolling the dice here..) Another reason is that ^VIX peaks are often good for the F-Fund.

 

[Fivetears]

ayla, is this a good PPT slide presentation explaining VIX?
http://www41.homepage.villanova.edu...rs_and_Presentations/Fear Gauge.ppt#256,1,The FEAR Gauge

 

[ChemEng]

Very interesting link. Thanks for sharing!!

 

[fabijo]

ayla,

I just want to say thanks for your research into the VIX. I think its great how people on this board are sharing their views and letting their theories be tested and analyzed by everyone else.

Fab

 

[ayla]

ayla, is this a good PPT slide presentation explaining VIX?
http://www41.homepage.villanova.edu...rs_and_Presentations/Fear Gauge.ppt#256,1,The FEAR Gauge

Thanks VERY much for the link. Helps in my learning curve. I didn't know about the VXN NASDAQ volatility index. So many indexes, so little time, LOL. Gotta plot this one and check it out. We own some GOOG and APPL stock so this might be VERY helpful.

I especially appreciate the fact that it agrees with my assessment (like I'm a real expert here, LOL), that when the VIX is low it doesn't really tell us anything except that a downturn is not in the immediate future. When the VIX is high (on a given day), market is usually down though because the I fund has other issues such as FV and its international elements, not always as useful for us TSPers as we would like it to be.

As far as the other info, a lot of it was over my head because my knowledge of options, and put/calls is about zero. That is next to learn in my attempts to understand the market. If anyone has a good link (there seem to be so many to choose from) or book, let me know. I have a huge gap in this area.

Thanks again.

 

[FUTURESTRADER]

Thanks VERY much for the link. Helps in my learning curve. I didn't know about the VXN NASDAQ volatility index. So many indexes, so little time, LOL. Gotta plot this one and check it out. We own some GOOG and APPL stock so this might be VERY helpful.

I especially appreciate the fact that it agrees with my assessment (like I'm a real expert here, LOL), that when the VIX is low it doesn't really tell us anything except that a downturn is not in the immediate future. When the VIX is high (on a given day), market is usually down though because the I fund has other issues such as FV and its international elements, not always as useful for us TSPers as we would like it to be.

As far as the other info, a lot of it was over my head because my knowledge of options, and put/calls is about zero. That is next to learn in my attempts to understand the market. If anyone has a good link (there seem to be so many to choose from) or book, let me know. I have a huge gap in this area.

Thanks again.

ayla,

A tidbit for further $VIX understanding: The intraday charts of the S$P 500 and the $VIX are mirror image inverses.

See below link for more on options:


http://www.optionsnerd.com/

 

[ayla]

I just went to 100% G fund - largely a gamble. Looking at charts from previous VIX activity, seems like we could have a really squirrely day tomorrow. Even the F fund might lose a penny along with everything else going south. Why lose a penney if I don't have to?

Major conjecture here - being a bit nervous doesn't help much and of course the NEWS today will make a big difference.

But if my conjecture is right, I'm thinking tomorrow will be a great day to buy into S fund. We'll see.

ayla,
A tidbit for further $VIX understanding: The intraday charts of the S$P 500 and the $VIX are mirror image inverses.

See below link for more on options:


http://www.optionsnerd.com/

Thanks Futures - will check on the "intraday" stuff. I registered in optionsnerd but haven't looked further yet.

I'm thinking that the "inverse image" relationship is only true during this
particular time when the VIX is going thru its 3-5 month cycle of large peaks and valleys. I know that seems true (for the most part) for the TSP funds comparisons with the VIX closing price. I will be interested to see what happens to intraday prices when the VIX is going thru its "low activity" cycle.

 

[GUCHI]

Ayla

do you plan to hold goog or lookin to sell ?? i have a small bit too and plan on holding since the word out is a good potential to hit $600 within a year.

guchi

 

[ayla]

Ayla

do you plan to hold goog or lookin to sell ?? i have a small bit too and plan on holding since the word out is a good potential to hit $600 within a year.

guchi

Yes, we are definitely "buy and hold" unless it starts dipping too badly. It is part of my husbands IRA. Though don't want to follow it down if bad news. Hoping for clear sailing ahead.

 

[ayla]

VIX is down 3% as I'm writing this. Still early though I'm surprised. VIX is in a pattern where in the past, there is major oscillation. Seems there is a valley going on right now.

The sooner there is a reaction in the form of a peak, the better because I think we want to get this VIX event behind us. Seems to be dragging out the inevitable downturn (could be relatively minor) that will happen during the next VIX peak. In the VIX world "a reaction seems to generate an opposite reaction", so could be that this lower valley is a precursor to a higher peak.

I thought the peak would be today, I would have bet on it but not yet anyway. Reason I'm saying the peak hasn't happened yet because normally, the peak is above the 200 day average.

I'm planning on moving to the S-fund when it happens. If this current reaction in the form of a new (local) peak never happens, well then this will definitely be a new "trend" for the VIX.

p.s. the VIX 200 day average today is 13.066 which means a spike of the VIX above the 200 day average would mean an increase of over 22% from closing yesterday, not an impossibility if history is a guide but from what it is looking like right now, won't be today..

 

[ayla]

I've been checking out the 5 day intraday chart for the ^VIX on yahoo. The ^VIX is going thru some MAJOR oscillations which you can also tell if you just get a quote now and then but the 5 day chart REALLY shows it.

Yahoo 5 day chart should be at:
http://tinyurl.com/y6rv9e

or

( http://finance.yahoo.com/charts#chart4:symbol=^vix;range=5d;
indicator=sma(20,50,200);charttype=line;crosshair=on;logscal
e=on;source=undefined )

Looks like there is some type of resistance at what this chart is calling a 200 SMA. Not sure what these 200 SMA values are on this chart, they seem to cover two days. I'm thinking this is the 200 SMA if you factored in datapoints every 15 minutes. Just guessing.

If you request a 6 month (or longer) time interval, you will see that the standard 200 SMA for the VIX is still over 13. It hasn't come close to that recently. That is the really critical point from what I can tell.

My watching this will hopefully be invaluable during any future major oscillations of the VIX but doesn't help me today when I'm trying to figure out before noon whether to throw down the gauntlet and buy into the I or S funds (and join what is apparently a Christmas rally) or whether to wait for a better buying opportunity (I understand Tom's dilemma a lot better now.) Maybe I'll flip a coin, LOL.

It also doesn't help that I HATE being out of the market.

Hopefully I'm learning something that will help me predict more precisely when a breakout for the VIX into "above SMA 200" territory is really going to happen in the future. Looking at old data based on VIX closing info more carefully, it could be 3 weeks or tomorrow.

..wish I had historical intraday info for June.