Bulls vs. Bears
Are you watching the VIX? Over the past 2 weeks, the VIX it has moved South to its 200 day EMA. It told us what would happen, and it did.
1. VIX: 23.95; -1.1
2. VXN: 24.15; -1
3. VXO: 22.53; -1.91
4. Put/Call Ratio (CBOE): 0.88; -0.02
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.

Bulls vs. Bears

This is a reading of the number of Bullish investment advisors vs. Bearish advisors. This indicator gives us a look at Bullish investors too bullish then everyone is in, and a Top is shaping up and visa-a-versa.

Bulls are at 37.0% vs. 38.5% prior and falling. A steady move South of 43.8%, 47.2%, and 56.0% prior. This move started at a low of 35.6% in February, the lowest it has been since July 2009. 35% is the Key level suggesting Bullishness.

For your reference The Bulls are over the 35% level that is the Key level for a Bullish climate.

Bears are at 32.6% from last week reading at 31.5%, it is not crossed over yet with Bears topping Bulls, but it looks like it is moving that way. The Bears rose from the mid to upper 20′s, then fell to 18.7% on the low, they hit a high of 27.8% on the last leg in February. A reading over 35% is considered Bullish for the market.

For you reference a break through the 35% threshold is considered Bullish, and the Bears hit a high on this run of 47.2%. Bearishness hit a 5 yr high at 54.4% the last week of October 2008.

Posted by Shayne Heffernan on Jun 21st, 2010and filed underEquities, Latest News, Markets, 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