Comments on: Bad News is Only Shocking Once

By: Mo Shaarani

Mo Shaarani — Wed, 05 Dec 2007 06:39:24 +0000

Thanks for the links Scott.

By: scott

scott — Wed, 05 Dec 2007 03:18:26 +0000

this is the chart tool link. They give you access to changing the parameters. Also they provide a link to add to a web site.

http://charts.technorati.com/chart/VIX?chartdays=180&language=en&authority=a4

By: scott

scott — Wed, 05 Dec 2007 03:15:42 +0000

the article is dated tue nov 27, Not a Lot of Fear or Volatility Lately

http://vixandmore.blogspot.com/

By: scott

scott — Tue, 04 Dec 2007 14:29:07 +0000

I would of posted a link but cant remember where i saw the article, i monitor to many sites. I will check my history tonight, maybe i can find it again.

Like i said in a previous post, this issue has really got my attention. Figuring it out could be very rewarding financially, imho.

I love the charts here. There are some extremely powerful indicators here.

By: Mo Shaarani

Mo Shaarani — Tue, 04 Dec 2007 09:12:29 +0000

Scott,

You shed light on some interesting points in your earlier comments.

It is fascinating how shifts in mass psychology affect or are affected by all sorts of events around us and I can imagine there is room for some big debates regarding causality here.

Also, I would be grateful if you could post a link to the post you refer to above. It would be interesting to learn more about the methodology used.

By: scott

scott — Tue, 04 Dec 2007 01:47:09 +0000

Another correlated explanation, related to the “Institutionalized” trading you mentioned above was highlighted on a recent trading blog. The writer uses a historically searched for the word $Vix across all websites and used high incidence of hits as a predictor of market bottoms. He showed graphically a very high correlation to market corrections and the use of the word $Vix in the media/internet/blogs. The peak usage on every occasion sited correlated to market bottoms.

He noted that during this current correction that there was very limited use of the word $Vix in the media. Instead he noted a high degree of correlation between the words sub-prime, and rising oil prices and the correction.

Apparently, the use of the word $vix is not as strong of a market mover as sub-prime is today.

In a recent Wall Street Journal article, Citadel chief Ken Griffin was quoted as saying, “that the time to be buying distressed securities was at the moment newspaper headlines were all saying at the same thing at the same time about sub-prime…”

Mr. Ken Griffin understands the media effects and market psychology very well.