Online Stock Trading | VIX Wakes Up, Is The Bottom In?

VIX Wakes Up, Is The Bottom In?


Filed Under Market Commentary |

6:25amEST Fear Has Finally Crept Into the Market, Stocks Get Sold Despite Ben Bernanke Testimony

When the Path of Least Resistance is in one direction you can only imagine how easily price movement moves along that path. Today, this path is clearly down and Thursday’s session only proves that swimming against the current only loses you money.

More fallout from the housing/mortgage market has MER reported pre-market. It comes no surprise to me that we continue to see write-down after write-down. LEH and GS followed suit with MER closing the day on its lows hinting at lower lows to come. The question that everyone seems to think they have the answer to is when this subprime mess is going to be over with? It is a shame, not for a while. The peak of the “teaser” “subprime” mortgage issuance was in the summer of 2005. Just looking at what the consumer opted for, the 3 year teaser we know that in 2008 will be the peak. You can not honestly say that MER, LEH, GS and others have completely removed all subprime loans off their balance sheets! Look for more of it to continue.

Two more items: VIX & ABK/MBI

Lets roll with ABK and MBI. Before I say anything check out the charts:

ABK.PNG

MBI.PNG

Not sure what else can I can say here. I wouldn’t be bottom fishing, but I do believe this is telling us we have more to go with subprime.

And to the VIX. So many saw the VIX yesterday and concluded we are NEAR the end! However, just taking a look at the August lows in the market and what the VIX hit that day you can see we have plenty more to go. CNBC was referring to the VIX and said we are closing in on the bottom. That is all the retail investor needs, buying a falling knife. We need the VIX to surpass the highs of August to even come close to a bottom here.

Keep it simple, cash and more cash!

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One Response to “VIX Wakes Up, Is The Bottom In?”

  1. Monster Stock Trader » Blog Archive » VIX Wakes Up, Is The Bottom In? on January 18th, 2008 8:31 am

    […] (more…) This entry was posted on Friday, January 18th, 2008 at 5:31 am and is filed under Market Speculator. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site. […]

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