VXO is busting through the BRL intraday…we'll see where it closes.

spreadtrader said:

……………………………an even better buying opportunity.

But you have to be patient and wait for it. It's like Chris Berman waiting on that hanging curve ball……..

……. ti-i-i-i-i-i-ck-tic-tic-tic-tic.

I’ve become convinced that the big fish’s programmed buying and selling during weeks like this is intended in part to make quick profits from the small fish, scare them out of the market and lure them back in at the wrong time.

@ Will post #29

I was going to use a simple moving average.  In when above 200 day and out when below 200 day. 

@SmcGuire post #31

Thank you for the suggestion.  I have not subscribed to DWA, yet.  It is on the “wiish list” page of my multi-volume “to do” list.  However, I would like to discuss the details of MNYMKT vs SPY.  I don't want to hijack the VXO thread so I will start a new one.

smiling2bank said:

Would it be a better buying opportunity to wait until the column of X's stops going up?

I am using Stockcharts.com.  Is there a way to see what date that an X occured?  That way I can compare the market price at the time that the X's occured.

No.  I have not read DWA.  It must be obvious. 

“Would it be a better buying opportunity to wait until the column of X's stops going up?” Absolutely. See post #34.

“I am using Stockcharts.com.  Is there a way to see what date that an X occured?” The only way I know is with DWA Smart Charts. The dates this year were March 6 and 9, April 1 and 2, April 28 and 29, June 17 and 18, July 8 and 9, October 2 and 5………..and soon. You would have experienced a small drawdown after June 17 and 18, and presently from October 2 and 5. However, that's why you should follow the method with discipline so that you are buying all of the way up. Obviously, if you just start doing this now, it gets more and more risky……because one day, the market will turn for good (or bad).

The other thing is, to catch the absolute bottom dates would be……….well, very clever. For example, we may be in the same situation as we were on March 6, April 1 and April 28. But how would you know? That's why it's a good idea to do two things. Enter with small positions so you cluster your buys around a series of down trading days, sort of like dollar cost averaging; or wait until the day of the reversal from X's to O's. Either way, you may want to protect any new stock position with puts because if you're the last sucker in the door, you want to have one foot out the door when the herd starts to stampede lest you get trampled.

spreadtrader said:

VXO punched well through its down trend resistance line in connection with a new buy signal. Now we'll see just how much fear this market correction will inspire.

VIX also made a buy signal but has yet to decisively punch through resistance. Both are operating on positive weekly momentum and negative monthly momentum.

This is the first time since March that these indicators have broken above resistance. I'd like to see them at 40 or higher. Although it seems counter-intuitive, times of exceptionally high market volatility make for the best buying opportunities.

VXO punched through the resistance line on 10/30/09 and is currently at 30. Was it a great buying opportunity on 10/30/09? I thought it was although like you'd said earlier, many of us were probably thinking of selling, and that should make it an even better buying opp.

Now if VXO continues going up on 11/02/09, then the market correction continues?

CNN business news predicted the market is poised to open up higher. Now that does not guarantee that it will stay up the rest of the day.

Will, I'm not a day trader and what the market does in one day is of little consequence to me, except as I view it in the context of the bigger picture. If the market opens in positive territory and stays there today it does not mean that the rest of the week won't be down (but it doesn't mean that it will, either).

Also, and consistent with my previous posts, if the market opens and stays higher today I would rather not buy stock UNLESS I've concluded that the correction has ended (which I haven't, though I'm often wrong). The point is, have a notion about what you think the market is doing in a broader sense, plan for that, then plan for contrary or additional contingencies; and then execute your plan.

“Now if VXO continues going up on 11/02/09, then the market correction continues?” That's the idea, as the broad stock market is generally inversely correlated to the options index.

“CNN business news predicted……” While I agree that their “prediction” in this case is probably due to the over night market action in Asia (a halfway reliable indicator of how the U.S. markets may open), if you put much faith in CNN business news, you might as well bleat like a sheep. 

Have a great week…..

ST:

The “O” is getting really close to the bullish support line. Wonder if there is any significance? I know this is not the time to buy stocks. Maybe it is time to buy some puts?