US MARKET SENTIMENT

1. VIX: 26.24; +0.51

2. VXN: 28.07; +0.44

3. VXO: 26.68; +0.95

4. Put/Call Ratio (CBOE): 1; 0

Bulls vs. Bears

Bulls are at 41.7% vs. 38.9% and on the rise from that 35.6% hit 3 weeks ago when the Bulls and Bears crossed over. Now they are heading in opposite directions just as the market rolled over. The high on the last leg was 56.0%

For your reference: The Bulls high’d out near the 50% level. Bulls have bumped at 50′ish since late August 2009, falling to 45′ish and then rebounded hitting a high of 47.7% in mid-June 2010 on the run from the March lows. Note: to be seriously Bearish the Bulls must run to the 60/65% level.

Bears are 27.5%. The Bears are on the endangered species list, falling from 33.3% last week and 35.6% just a few weeks before. Hit 18.7% on the low. Hit a high of 27.8% level on the prior leg in February.

For your reference: a move over 35% is considered Bullish for the market. They touched at 28% in November 2009, falling short of the 35.6% hit in July 2009. A move above the 35% is considered Bullish. Hit a high on this run at 47.2%. Note: Bearishness hit a 5 yr high at 54.4% in the last week of October 2008. Stay tuned…Paul A. Ebeling, Jnr. www.livetradingnews.com

NB: Are you watching the VIX? It always tells us when we are moving back to a more rational market.

*The Market Volatility Index (VIX) measures the volatility of the market. A recent news story described it as “the options market’s gauge of investor fear.” Traders use VIX as a general inverse indicator of market volatility and sentiment. High numbers mean that there’s excess bearishness, and low numbers indicate excess bullishness. The VIX is updated intra-day by the Chicago Board Options Exchange (CBOE), using Standard & Poor’s 500 Index (SPX) bid/ask quotes. It was created in 1993.

**The CBOE NAS Volatility Index (VXN) employs the same formula used to calculate US$VIX, which is based on the implied volatility of S&P 500 index options. This formula is derived from a basket of put and call options. Some are out of the money, some in the money, and some at the money. The resulting US$VXN represents the implied volatility of a hypothetical 30-day option that is at the money.

***The VXO is the ticker created to track the “original VIX” that was calculated using the prices of S&P 100 options. The new VIX uses the ticker US$VIX and is calculated using the prices of S&P 500 options. The fundamental nature of the VXO is the same as the VIX, but it is less robust and not as simple as the VIX.

Posted by Shayne Heffernan on Aug 16th, 2010and filed underEquities, Latest News, Markets, Oil, USA.You can follow any responses to this entry through theRSS 2.0You can leave a response by filling following comment form or trackback to this entry from your site