ES Journal - 2013

Quote from RichardRimes:

Agree that it lags and is not a good prediction tool. However it does IMO confirm a general attitude in the market place. A 13 vix which changes only 20-30 cents in the face of a 10p12 pt drop is a complacent market . It suggests....not predicts....upward bias.
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RR, respectfully you are so highly misreading things. The futures are 14.98 and 16.12..think about how that may swing the index. Furthermore you are suggesting that spx option traders know which way the market is going...so if they are not buying puts that means the market has blue skies...you also had a rebalancing today.

Anyway...can you explain how on the last vix peak shortly thereafter the market went up? Using your logic a 17 vix from 12 suggests otherwise. I don't have time to delve deeper but suffice to say, vix is simply a statistic on what emotional human traders are buying and they have zero predictive abilities.
 
VIX can and does often go up when market goes up. I'm using it as a relative measure. Op ex..rebalancing etc all are factors. My most important measure is MY overall delta risk. Right now since Im neg delta in my overall positions I need to buy calls or sell puts and Im comfortable doing so ESP since VIX is "relatively" low. I do not trade the VIX so I use it as a part of the puzzle.

I can't speak for all option traders but I try to stay neutral on the market. Of course there are times when it hits technical levels that I get biased, but I still try to stay agnostic. I don't need to be right just as long as I'm not dead wrong:). I trade the ES because I'm very familiar with it and use options because close is good enough.
 
Quote from sellindexvol66:

R
Anyway...can you explain how on the last vix peak shortly thereafter the market went up? Using your logic a 17 vix from 12 suggests otherwise. I don't have time to delve deeper but suffice to say, vix is simply a statistic on what emotional human traders are buying and they have zero predictive abilities.
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A 12-17 move in the vix WAS pretty strong...however...only relatively. I rememberer (as do you) when 22 vix was "low" and we saw..30, 50 70!!! in 2008-2009; Again to me the VIX is a "relative" measure of the fear or complacency in the market and until we start seeing 20's 30's in the VIX I will maintain a positive bias (long, med term). Since I trade monthly and weekly options I can't turn on a dime, I have to let the market come to me. I have some short calls in the low 1600's for OCT so I would be quite content to see ES drop 50=70 pts....but I don't "think" it will.
 
Quote from RichardRimes:

A 12-17 move in the vix WAS pretty strong...however...only relatively. I rememberer (as do you) when 22 vix was "low" and we saw..30, 50 70!!! in 2008-2009; Again to me the VIX is a "relative" measure of the fear or complacency in the market and until we start seeing 20's 30's in the VIX I will maintain a positive bias (long, med term). Since I trade monthly and weekly options I can't turn on a dime, I have to let the market come to me. I have some short calls in the low 1600's for OCT so I would be quite content to see ES drop 50=70 pts....but I don't "think" it will.
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yes, my main point was to suggest that vix is a poor forward indicator, etc. good luck.
 
Since 1999 nearly half of the components in the sp composite has changed and the dow is swapping out 10% in a day. While no money is benchmarked to the dow it is the most widely quoted and followed public index. I think it is disingenuous and inaccurate to even make comparisons to market highs from 2000 or even 2007 till now, not even mentioning the skewing effect the capitalization weighting the sp, and price weighing the dow stocks have over longer periods of time.

Great information LC.

Quote from Lawrence Chan:

WTF Chart of the Day: Dow Component Changes On Sep 20, 2013
http://www.daytradingbias.com/?p=103556
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