Investor "fear gauge" near all time low...

DaveinJapan said: "Check out VIX, it's REALLY low right now. Does this concern anyone else? I guess I'm asking for overall opinions on the market right now, and where we think it's going in the short/intermediate term. I hate to sound negative, but I've got a funny feeling that things are just a big TOO exuberant right now. :dazed052: Plus, I was checking out the Cramer vids on thestreet.com and he mentioned the fact that this was the first month in like a DECADE where there wasn't a single down day for the week going into options expiration. I noticed that last week, and thought it was kind of funny (funny interesting, I mean). Are things just that great, and the market will continue on a positive roll for a while? Of course, noone can predict the future. I'm just wondering what other people's opinions are at the moment. Also, I read that there would probably be a lot of profit taking during the short trading week coming up, since investors are closing the books and taking profits in preparation for the holidays. Any truth to that (past precedent, I mean)? Thanks in advance, guys. It's great to hear thoughts from people who've got lots of experience in this game. :)"

Paq13 said: "i noticed that too. i get nervous when everyone is too happy...all i can see is the 2000 KABLOOEY all over again."

JCast3 said: "[QUOTE=Paq13]i noticed that too. i get nervous when everyone is too happy...all i can see is the 2000 KABLOOEY all over again.[/QUOTE] i dont know if it'll be that bad, but, i foresee a nice little correction when the new year hits....i'd imagine mutual funds will be taking their fair share of profits.... i'd be careful with any dow components trading at or above their 52 week highs...."

Rickster said: "There are a lot of classic indicators that would suggest a top. And my positions have jumped in the last few weeks. It seems like a correction should be around the corner. But I really dont see exuberance anywhere. I see a lot of caution and skepticism. So I dont think the bull run is exhausted. But we may be in the final stretch (for a while). My stock account, which is a relatively small fraction of my investments, is still 100% long. A guy needs to be careful when assessing the market in terms of correlations to indicators that worked in the past (like the VIX). Market behavior is constantly shifting. This is sometimes called the Law of Ever-Changing Cycles. It has to keep changing or else it would end like a game of monopoly, with one person owning everything. There once was guru named Marty Zweig. He developed some very good rules, wrote a book and even started his own fund using his rules. But the market correlations changed, his fund did poorly and so did anyone who followed his rules after he became too popular."

Mr. Gekko said: "Cramer mentioned that on his radio show on Thursday as well Dave. He said it was a signal that the Bull run isn't over. I also noticed the .VIX was low as well. I agree with the Booyah guy. As I've mentioned in other threads, this rally is for real unlike the artificial run we had from January to March. It was artificial because it was commodity driven and not broad based like this run. So, as long as oil stays low we're fine. Oh... and there's speculation that the Fed will cut rates at their next meeting. I know, I know... how many times have we heard that. But, they [B]will[/B] cut at some point. And, when they do, we will have a total Ralph Kramden "Bang Zoom To the Moon Alice" market on our hands."

thezster said: "I have to agree with the concept of a rate cut affecting a number of stocks immensely. Which is why I'm currently trying to pick up HD/TOL/LOW at a reduced price until the next fed meeting. Haven't gotten the price I want yet (I'm a greedy sort) - but feel that, with the amount of time until the next announcement, I've got time to play the field. In the interim - I'm picking up on 4-5 day lows as possible - cause I feel the current bull market will continue for another few weeks, at the least. Grabbed GRMN (1000 shares) this morning - and a few hundred FRO (trying to pick up either the dividend or the price rise in anticipation of same)...."

JohnL said: "Can someone explain to me how fear is quantified."

lil dickie said: "Great question. They use mathematical modeling to attempt to guage it. They can't be totally accurate, but you never know. :th_dblthumb2: :th_dblthumb2:"

FirefighterB said: "[QUOTE=JohnL]Can someone explain to me how fear is quantified.[/QUOTE] I'll start a simple table of symbols: F = fear Bs = amount of blab about stock market prowess and growth rate, or the later approaching decline and their exit of the market (VERY DANGEROUS) coming out of Joe Cubicle's and/or Tanya Watercooler-Gossips' pie hole(s) Df = Jim Cramer Effect N = amount of "buzz" (can be a + or - value) on 24 hour news network $ = amount of money you have in the stock market ^ = raised to the power of * = your affinity for this amount of money, your interest in gambling, or your craziness These together equal my, albiet crude, fear quantification equation: F = {(Df + N) + Bs}/$^* Please disregard all rational through when using this fear quantification equation or you risk losing, or losing the ability to make, large sums of money. Don't forget to study, there will be a test over this material next class period."

DaveinJapan said: "[QUOTE=JohnL]Can someone explain to me how fear is quantified.[/QUOTE] I guess it'd be better to call it "investor caution vs. investor optimism". I read a little about it, and the calculation is based on futures speculation...the number of puts vs. calls, and that sort of thing."

Mr. Gekko said: "[QUOTE=FirefighterB]I'll start a simple table of symbols: F = fear Bs = amount of blab about stock market prowess and growth rate, or the later approaching decline and their exit of the market (VERY DANGEROUS) coming out of Joe Cubicle's and/or Tanya Watercooler-Gossips' pie hole(s) Df = Jim Cramer Effect N = amount of "buzz" (can be a + or - value) on 24 hour news network $ = amount of money you have in the stock market ^ = raised to the power of * = your affinity for this amount of money, your interest in gambling, or your craziness These together equal my, albiet crude, fear quantification equation: F = {(Df + N) + Bs}/$^* Please disregard all rational through when using this fear quantification equation or you risk losing, or losing the ability to make, large sums of money. Don't forget to study, there will be a test over this material next class period.[/QUOTE] When you calculate the above equation you can replace [B]F[/B] with [B]YF[/B](which stands for "Your F&cked!")."