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Sunday, June 7, 2009

Fear Factor

How can P2 end so quick? Its only been rallying for 3+ months. One way respond to that question is raw fear (by use of the VIX) has been correcting downward for over 7 months going on 8. So from that respect, its not unrealistic to say that P2 is topping.

Its probably not possible, nor practicable, to do a pure EW count the VIX. However it definitely displays certain aspects and short term patterns, relationships and trendlines.

Thats one big giant falling wedge. But it doesn't quite look finished. It has to hit the Kenny Dot (TM) to do that. That would hook up with a nice trendline.

10 comments:

  1. gorgeous chart dano ......how bout a gold chart of your choosing.......

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  2. Didn't Kenny say that sometimes the market doesn't even make it to the Kenny DOT.

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  3. Yup Sumit. There is a chance the recent VIX of 26 was the low and one last squeaker down will not occur.

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  4. Connect the bottoms of the last 3 wedges(including this one).

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  5. Thats pretty sick how all three falling wedges were followed by huge thrust upward. I guess its supposed to happen that way? I thought the market was behaving less rational and predictable lately...

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  6. I bought some august 30 vix puts on friday's close. My exit target was mid-20s but maybe I'm being a bit too optimistic there. Thanks for the update.

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  7. Very interesting concept. More proof we are either at or very near the top.

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  8. Think DE is on the money IMHO. Unless we go down and test 900, the trend is still up. The roughly ten day correction in mid may is the longest correction without a new high being made since March 6. It must be significant, just don't know how it fits into the larger picture

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  9. You need to brush up on drawing your K dots LOL. Thanks.

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