Then there was the VIX, which so neatly called the bottom last Monday, topping out less than 2 points shy of its Jan. 22 multi-year high. Now that was a time to buy the market.
Since then, it has generally trended lower, while reflecting the market's gyrations. On Monday, the VIX traded down to 24.75, representing a 30% drop from last Monday's highs. That's certainly not very bullish for the near-term, as recent history has repeatedly shown us that buying stocks after a 30%-35% drop in the VIX has generally not been a profitable strategy.
Early last week with the market at its lows, I was holding positions up to a maximum of 70% invested. Tuesday at the close, I cut back to just 25% long. If they hit it, I will buy it. Otherwise I can wait.
Technical Analysis This Rally Shows Some Promise 3/26/2008 10:02 AM EDT Unlike the swings over the past few months, there is support for the idea that this one may have some room to run.
Technical Analysis Fitz Bits: AAPL's a Buy on Pullbacks 3/26/2008 8:51 AM EDT I expect seasonal weakness for tech, so you could get into Apple soon.
At the time of publication, Schiller was long SPX, Russell 2000, NDX, Dow and Financial Services mutual funds up to 35% levels, with lots of cash on the sidelines, although holdings can change at any time.
Dr. Harry Schiller is a Registered Investment Advisor with the California Dept. of Corporations. He holds a Series 7 General Securities license as well as a Series 4 Options Principal license. He has been owner and editor of the Short Term Consensus Hotline since 1988. For more information, see www.harryschiller.com. Under no circumstances does the information in this commentary represent a recommendation to buy or sell stocks. While he cannot provide investment advice or recommendations, he appreciates your feedback; click here to send him an email.
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