Wednesday, July 26, 2006


Interesting day. The VIX misprinted a spike so I switched over to the VXO. I did a study some time ago and found that there is little difference in the vectors between the two of them with the exception of magnitude. But that cuts in both directions - i.e. the VIX can lead or the VXO can lead. Six of one half a dozen of another. (Even though I'm not trading I am watching and learning).

About 10:15 on the 5 minute charts the VXO started looking weak. This only becomes obvious if you continue to observe until about 10:30. At that time I noted a gap-down, NSC (almost $6.00 down from yesterday's close), started stirring. One could have gotten in for about $40 at that time and by 2 P.M. it was at $41.25 ending the day at 41.50. This would have been a nice scalp and all you had to do was watch the volatility indices for your tip-off and have a list of gap-downs ready to go.

I lost 4 cents on INTC, 1 cent on EZM and gained 54 cents on PXE - so a good day with some profit to show.

Taking one more day off from trading tomorrow and will see what happens on Friday.

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