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Eric Peterson

Eric Peterson
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  • A Very Middling Pullback, So Far [View article]
    5-8% more? Based on what?
    Feb 6 06:15 AM | Likes Like |Link to Comment
  • The Most Reliable Stock Market Indicator You'll Ever Find [View article]
    I don't see how this has any prediction ability. There only seems to be a correlation: the two move together.

    Kind of like if I showed you chart of the SP500 and the Dow, and said "look how amazingly correlated the charts are!" So what? Can you predict moves in the SP500 from a chart of the Dow? No.
    Mar 21 12:22 PM | 1 Like Like |Link to Comment
  • How Often Does S&P 500 Have 10% And 20% Negative Price Moves? [View article]
    Thanks for the reply. I just wanted to point out that a 10% correction that occurs inside a single quarter won't show up in your study. It will show up only if we are still down 10% or sometime in the next quarter.

    It's not really about the time horizons of different investors. It's just a question of whether you want to find all the 10% corrections that have occurred, or not.
    Mar 21 11:58 AM | Likes Like |Link to Comment
  • The Shocking Truth About Insider Selling [View article]
    Lou, I notice in your first chart showing headlines about insider selling, that labels 3, 4, and 5 indicate market timing that is not so bad. A year later, the market was either lower or at about the same level. Not such bad bearish calls in a market that has been basically going straight up for 4 years. Only label 1-2 (which occurred at the same time so only count as one label) was a bad bearish prediction.

    In other words, if you had to find times on that chart where the market would not be higher a year later, labels 3, 4, and 5 nailed it pretty well.
    Mar 20 10:42 PM | Likes Like |Link to Comment
  • How Often Does S&P 500 Have 10% And 20% Negative Price Moves? [View article]
    Curious why it was necessary to chunk the data into quarters. Couldn't you put in all the daily SP500 closes, and see how often there was a 10% (or 20%) decline from the trailing 52-week high?

    Then you would catch the cases where the SP500 dropped 10% from a high that was set in the same quarter. If I understand your method correctly, those cases are not included in your study.

    For example, if the SP500 is 1500 on January 2, a new high, and then drops below 1350 on March 2, that's a 10% drop, but it happened all in the same quarter and wouldn't count as a 10% drop using your method. Only if the SP500 was below 1350 sometime during the second quarter (after March 31), would it be counted.
    Mar 20 10:26 PM | Likes Like |Link to Comment
  • Lowest VIX Close Since Day Before Biggest VIX Spike Ever [View article]
    "you wanted to go long the VIX how could you do it?"

    It's not possible to go long the VIX itself. If you could you would be a billionaire by buying the VIX and shorting VXX, guaranteed free money over the long term.

    Unfortunately the indirect ways of going long the VIX, such as buying VIX futures, buying VXX, shorting XIV, or buying VIX calls, all lose money with time due to contango.
    Mar 15 05:18 PM | Likes Like |Link to Comment
  • Is This The Most Reliable Stock Market Indicator Ever? [View article]
    I think it's not particularly useful to compare the whole year's return to January's return. Much more useful for investing is to compare January with the return for the following 11 months. Then it would actually be a prediction.

    The market can actually drop 4% from January's close until December's close, and still be up for the year, but I wouldn't call that a success for the January barometer!

    To put it another way, you can't buy the market at the open on January 1 if it's already January 31!
    Feb 21 03:25 AM | Likes Like |Link to Comment
  • VIX - Options Volatility And Market Sonar: Wednesday Recap [View article]
    Erick, if these guys are placing higher bids for puts at the open to make the VIX settle higher, what if other people accept those bids and force those manipulators to buy a lot of puts?

    Or is the amount the manipulators would have to buy much less than the amount they are saving by driving the VIX settlement higher?
    Feb 14 02:04 AM | Likes Like |Link to Comment
  • VXX, VXZ Celebrate 4th Birthday [View article]
    Sorry, I have no idea what your point is. The facts are that holding VXX long term has been a disaster. As a short-term trading vehicle for successful market timers, it may be ok. That's my only point, and there's nothing wrong with that comment.

    I like Bill's articles, and read every one carefully. I suspect you are misinterpreting what I wrote or the intent.
    Feb 1 10:59 AM | Likes Like |Link to Comment
  • VXX, VXZ Celebrate 4th Birthday [View article]
    I'm not sure "celebrate" is the right word! VXX has lost 98.48% in 4 years. That means $10,000 "invested" in VXX would now be worth $152. Basically worthless.

    You have to be an exceptional market timer to make money going long something that dropped from $10,000 to $152 in 4 years.
    Jan 31 06:50 PM | Likes Like |Link to Comment
  • S&P 1500 Most Heavily Shorted Stocks [View article]
    Ok, should we take a contrarian point of view and expect these stocks to bounce? Or should we go with the flow and also sell them? Any statistics on the results of either strategy?
    Jan 30 02:34 PM | Likes Like |Link to Comment
  • VIX - Options Volatility Sonar: Wednesday Recap [View article]
    ZIV (inverse VIX mid-term futures ETF) is making a killing so far this year, with less volatility than XIV.
    Jan 25 05:51 PM | Likes Like |Link to Comment
  • Selling Puts And Calls: Dessert And Coffee [View article]
    I find it's really not worth selling any options when the VIX is below 14. The premiums are just too low, and the chances of getting hurt on a rally are too high.
    Jan 25 05:47 PM | Likes Like |Link to Comment
  • VIX - Options Volatility Market Sonar: Thursday Recap [View article]
    Hah! I've been trading options for many years, but never heard the term "call stupid". I thought you were calling the trader stupid for putting on that position. :)
    Jan 18 04:33 PM | Likes Like |Link to Comment
  • VIX ETP Performance In 2012 [View article]
    Don't hold VXX more than a few days. Never hold it longer and pray. A sure way to lose money. It loses money while the VIX index stays level.

    The inverse funds such as XIV and ZIV make money while the VIX stays level. You can hold them long-term, riding out VIX spikes and they make news highs when the VIX goes back down to where you bought.
    Jan 11 06:45 PM | 1 Like Like |Link to Comment
COMMENTS STATS
264 Comments
95 Likes