ayla Account Talk

[ayla]

I=50%
S=50%

I am using some logic but probably the main thing is that the VIX has an even longer way to go to get above the 200 day average than it did yesterday (at least at this time today ).

But most important reason is probably that I hate being out of the market when the trend is up for these funds. "The trend is your friend" right?

 

[Birchtree]

http://safehaven.com/article-6520.htm
For the VIX mavenette.

 

[airlift]

Ayla,
I wish I could help, but I can't. However, I see that Birchtree has posted another useful link - this in regard to the VIX. Regarding your VIX moving averages, the values will change at different time periods and ranges. The six month daily chart shows the 200 DMA SMA reading at 13.02, while the 10 min., 5 day chart shows a 200 DMA of 10.45. Again, I should, but I don't understand why this happens either, and this is supposed to be basic chart reading. My bad!

 

[fabijo]

The six month daily chart shows the 200 DMA SMA reading at 13.02, while the 10 min., 5 day chart shows a 200 DMA of 10.45. Again, I should, but I don't understand why this happens either, and this is supposed to be basic chart reading. My bad!

That's because the 200 SMA is calculated by averaging the past 200 periods. So, looking at the 5 day chart, each period is 10 minutes. But looking at the six month daily chart, each period is one day. If you were to use a weekly chart, each period would be one week.

 

[airlift]

Thanks Fabijo.

 

[ayla]

As I mentioned in James talk thread - because of the delays imposed on us as to when our IFT becomes effective and when we get the closing prices for the day of the funds, IMO, it is just about impossible to do any timing regarding when to buy and sell your position in any particular fund.

But there is one exception, when the VIX reaches its 200 day average which is 13.02 today, that is time IMO to get out ASAP. Needs to be watched closely.

There is a question in my mind when to buy back in also once there is a pullback. Not necessary to wait until the VIX goes below the 200 day average. Looks like one can use the peak of its 20 day average to determine a good buying opportunity but isn't terribly precise. I'm still looking at that.

Reason I'm still looking is that I think it is a matter of WHEN, not IF we're going to have another pullback that will be reflected in VIX prices. Given the price of the VIX today, I don't think it will be today.

Also, to make the problem more complicated, it appears there has been occasions where there is a significant run-up just before the VIX goes thru the roof. Timing this run-up given the delays of our IFT is one of the factors making the usage of the VIX complicated. We could be seeing that "run-up" right now.

My crude attempt to understand correlation between Fund prices and VIX quote for June 3, 2003 thru Dec 15, 2006----

Number of data points and percentage of total number of all data pts
(885 total data pts)

F - entries matched direction of VIX---------366-------------41.36%
F - entries matching Opposite dir of VIX-----519-------------58.64%
C - entries matched direction of VIX--------173-------------19.55%
C - entries matching Opposite dir of VIX-----712-------------80.45%
S - entries matched direction of VIX--------216--------------24.41%
S - entries matching Opposite dir of VIX-----669--------------75.59%
I - entries matched direction of VIX---------331--------------37.40%
I - entries matching Opposite dir of VIX-----554---------------62.60%

I've attached a pdf file of an Excel chart from September til now to give you a closer look at the correlation between VIX and S fund. Meant to give an idea. I have Excel data but to extract it (because of all the dependencies with my other data) is a bit more time consuming then I like given my lack of experience with Excel.

 

[Birchtree]

The candlestick pattern on the VIX indicates a continuation to the downside is the most likely move, so a top is not yet confirmed by the VIX for the S&P.

http://www.safehaven.com/article-6538.htm

 

[ayla]

The candlestick pattern on the VIX indicates a continuation to the downside is the most likely move, so a top is not yet confirmed by the VIX for the S&P.

http://www.safehaven.com/article-6538.htm

If I understand this correctly, sounds like the prediction of the VIX to continue downside means this analyst is predicting that there is still upside ahead for the S&P. No time interval reported. Rate things are going, seems that date for a pullback whenever it REALLY happens is moving further and further out.

 

[ayla]

just changed to:
S=50%
I=50%

Not feeling real great about this. I gotta go run some errands so I can't stick around. Don't like the increase in the VIX again and the S fund chart could be interpreted two ways, either very bad or very good. I fund is always squirrely but the F fund doesn't look good and I HATE going to the G fund. May wish I did.

Don't want to miss out on the Santa rally. (Have we beaten that to death enough yet?)

 

[Birchtree]

Another good read about VIX and some other diverdences.

http://www.safehaven.com/article-6541.htm

 

[fabijo]

Another good read about VIX and some other diverdences.

http://www.safehaven.com/article-6541.htm

Birch, seeing the negative divergence on the Dow Transports is not a good sign.

 

[Birchtree]

Yes, but remember the Transports were leading the Dow for over a year - they'll kick in soon, probably making up ground in this current rally.

 

[ayla]

Ahhhhhh - I love these painful learning curves (not to mention costly), NOT!
I just really took a look at the Dow Jones Transportation average chart and I SEE.

It doesn't BOUNCE around a lot. I think this low today is the REAL deal with future lows. Though don't count on it since my expectations don't seem to be working out well lately.

But honestly, in a perverted way, I do like these painful learning curves because I WILL REMEMBER this. Otherwise, it's history that I easily forget. Hate to think what new pain is ahead in 2007 ...at least it's rarely dull.

Thanks Tom for your editorial on the subject.
And Merry Christmas to everyone.

 

[Birchtree]

Don't let that transportation average fake you out - it can change quicker than you can blink. There is a Dow Theory buy signal on the horizon. IMHO.

 

[ayla]

Tom had some good charts that showed the SMA lines as well but I like this one at Yahoo:
http://finance.yahoo.com/charts#chart1:symbol=^djt;range=1y;indicator=sma(20,50,200);charttype=line;crosshair=on;logscale=on;source=undefined

or as a tiny url:

http://tinyurl.com/uutud

The Yahoo chart makes it obvious for me which is really what I was referring to before about the fact that the 20 day SMA doesn't move below the 50 SMA that often for the DJT and the quote/price doesn't move below the 200 day SMA very often. Both of these very negative events are happening for the DJT today or this week.

I wouldn't be surprised if there might be a couple of bounces but this along with the VIX going higher (as everyone has already been saying) seems to emphasize that a pullback is imminent.

I especially thought the fact that it was October 3rd when the DJT last moved above its 200 day SMA was interesting. Because Oct 3rd was the date I was comparing the stochastics for the S fund. Everything was very similar EXCEPT I didn't look at the DJT and I already mentioned in the S fund thread that the VIX position was not the same (trending up now when it was trending down back on Oct 3rd). BIG exception. (Learned that too.)

 

[ayla]

I was planning to move to the parking lot on the day before the holiday even before I learned about the negative DJT trends. This was recommended a while back by something published here - said just before a holiday was usually a very good time to be in the market and to get out quick.

Well, maybe somehow, I'll get lucky and there will be a bounce but I'm not holding my breath.

--100% G by cob 12/22--

 

[PCBill]

Ayla,

I'm a new guy on the block. I'm what you would refer to as in the learning phase.

On today's vix overlayed with sma 20, sma 50 and sma 200 the vix and sma 20 both spiked above the sma 50 then the sma 200 just after 3:00 pm and back down again prior to 4:00 pm. What do you make of it?

I noticed you were also following this data and would greatly appreciate your input.

Happy Holidays,
PCBill

 

[ayla]

On today's vix overlayed with sma 20, sma 50 and sma 200 the vix and sma 20 both spiked above the sma 50 then the sma 200 just after 3:00 pm and back down again prior to 4:00 pm. What do you make of it?

I noticed you were also following this data and would greatly appreciate your input.

Happy Holidays,
PCBill

Hi PCBill -
I'm definitely still learning regarding this stuff too. But looking at the VIX chart for the past 12 months, I think the recent activity is very consistent with some kind of VIX peak (above the 200 SMA) in the not too distant future. That is the question - how distant?

I checked out some numbers for peaks during the past 12 months and it didn't look like there would be that much to gain by staying in if as in my case, you're not too good at doing market timing VERY precisely.

The real question is how big of a peak is the VIX headed for. Could be one as small as occurred on January 20th. That would be only an average 30 cent (or so) drop in the TSP funds. But it could be bigger.

All I can say is that I'm watching ... my focus will be mostly on exactly when to get back in after the VIX starts peaking.

 

[PCBill]

Ayla,

Thanks,,,for your input. I have a feeling January will not be so great ,,,at least the first half. I will keep digging for data to support my theory.


PCBill

 

[airlift]

I don't know if there is any correlation or if this time it will be different. However, the 6-month daily chart of the benchmark S&P500 shows that the S&P500 dropped the last two or three days of December 2005, and rose until around the 11th of January 2006, and then dropped quite a lot! Although it rose again, and ended higher than December 2005, January 2006 was very volatile.