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Thu October 16th 2008
Extreme VIX Readings Suggest Imminent Upturn
by Mike Paulenoff, www.MPTrader.comExtreme VIX Readings Suggest Imminent Upturn
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.

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