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By Mike Paulenoff, www.MPTrader.com
The surge in the VIX (CBOE Volatility Index) above Friday's "emotional high" coupled with the behavior of the SPYs (AMEX: SPY) and Qs (NASDAQ: QQQQ) urged me to get long, but to "pick" a bottom using call options in the Q's. With the VIX above 81 and also above Friday's high at 76.94, the fear and extreme volatility factors are extreme, a strong suggestion of another violent countertrend move in the equity market ETFs approaching fast. In addition, the fact that the Q's pressed to new bear phase lows -- and did not go into a nosedive, while the SPYs did not make new lows -- signaled to me that the decline off of Tuesday was complete and a powerful rally likely.
Mike Paulenoff is author of www.MPTrader.com, a real-time diary of his technical analysis & trade alerts on ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international markets, plus key ETF component stocks in sectors like technology, mining, and banking. Sign up for a Free 15-day Trial!
