Top Performing ETFs

<b> FredBloggs</b>

Thanks for your post.

I was looking at the <b>VIX</b> this week-end, I did see the huge spurge in activity on <b>22.Jan.2010</b>. I have not followed the VIX regularly so I do not know how to use it.

Would you have any suggestions as to how one could capitalize on your observations?

Readers any ideas?

Quote from FredBloggs:

has anyone looked at vxx which i believe is an etf on the vix? (volatility of the s&p 500) interesting surge in volume recently.

interesting to me for 2 reasons:

1/ sure sign of accumulation as a speculative position in its own way.
2/ looks like some time frame is going long on equity volatility in a big way - fireworks ahead for the equity market.

just a casual observation....
More...
 
Quote from investics:

<b> FredBloggs</b>

Thanks for your post.

I was looking at the <b>VIX</b> this week-end, I did see the huge spurge in activity on <b>22.Jan.2010</b>. I have not followed the VIX regularly so I do not know how to use it.

Would you have any suggestions as to how one could capitalize on your observations?

Readers any ideas?
More...

yea - buy it!

take your chosen strategy/entry signal and apply! i think a lot will depend on your risk tolerance. it looks to me as though it has put a good low in place, all the sellers are done and there is only one way to go. whether that low will be tested of course, no one has any idea.

the consideration as ever is along the following lines:
1/get in now at the lows(?) you obviously get a better price, and higher potential return
2/ wait a little while longer for confirmation, thus sacrificing the potential return, and increasing the risk.

unfortunately, hindsight will be the only way to tell which was best...perhaps scaling in would be a good plan.


*******

to be truthful, i havent really looked at the background of vxx - just the title of vix in the description.

vix options trade on the cboe and are becoming increasingly popular amongst fund managers as a hedging tool against equity portfolios. if you do a search under alpha and then beta in investopedia.com you should get an idea on how they are used.

volatility, as i expect you are aware is a major element in the pricing of options. being able to hedge against that risk gives the ability to build a more consistent equity curve without such violent swings (in either direction) i believe.

the nice thing about volatility which may reflect in vxx is it's nice, cyclical nature. there will be fluctuations of course, but generally, the cycle changes/bull and bear markets of vxx *may* be easier to spot, and more consistent in nature.

vxx in my opinion is an alternative method to incorporate volatility hedging in a portfolio in a nice and simple etf. alternatively, you can obviously just use at as a directional tool for a momentum play as any other etf.

i hope that helps...
 
Thank you so much for the reply. Your email was very insightful, enough to convince to research VXX

Quote from FredBloggs:

yea - buy it!

take your chosen strategy/entry signal and apply! i think a lot will depend on your risk tolerance. it looks to me as though it has put a good low in place, all the sellers are done and there is only one way to go. whether that low will be tested of course, no one has any idea.

the consideration as ever is along the following lines:
1/get in now at the lows(?) you obviously get a better price, and higher potential return
2/ wait a little while longer for confirmation, thus sacrificing the potential return, and increasing the risk.

unfortunately, hindsight will be the only way to tell which was best...perhaps scaling in would be a good plan.


*******

to be truthful, i havent really looked at the background of vxx - just the title of vix in the description.

vix options trade on the cboe and are becoming increasingly popular amongst fund managers as a hedging tool against equity portfolios. if you do a search under alpha and then beta in investopedia.com you should get an idea on how they are used.

volatility, as i expect you are aware is a major element in the pricing of options. being able to hedge against that risk gives the ability to build a more consistent equity curve without such violent swings (in either direction) i believe.

the nice thing about volatility which may reflect in vxx is it's nice, cyclical nature. there will be fluctuations of course, but generally, the cycle changes/bull and bear markets of vxx *may* be easier to spot, and more consistent in nature.

vxx in my opinion is an alternative method to incorporate volatility hedging in a portfolio in a nice and simple etf. alternatively, you can obviously just use at as a directional tool for a momentum play as any other etf.

i hope that helps...
More...
 
The rebound yesterday, <b>01.Feb.2009</b> was decent.

The vol was below average.

Money seems to be moving in.

The new 26 week highs were low in count.

I am not convinced that the sellers are gone yet, thus I am still waiting in cash.
 
Decent upday <b>02.Feb.2009</b>, second day of the rebound.

The Vol is still below average or just about.

The 26 week highs were greater than the 26 week lows.

Money is trickling in, I want to see a huge influx of money coming in.

I would rather miss the boat than being caught with my pants down.

The next few days is going to be very interesting.
 
Our assumption of a weak rebound held its place.

The Vol yesterday was below average, money is slipping out.

We want the last of the sellers to plunge in, before we move in on the long side.

Until then the strategy will keep us safe.
 
The great Mark Minervini writes:
Monday, February 1, 2010
<b>Low volume rally; not very impressive</b>
Going into Monday, the general market was oversold and due for a bounce; it could even rally a bit further. So far however, the rally is anemic on low volume. I'm still cautious at this point; I think we could slide a bit more after a brief short-term bounce as early as this week or next week.

His post on his blog
 
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