Why I’m Looking At The Intraday VIX

February 13, 2003
Don Miller

Different day, same story.Â For
the first time since we started this trek a few years ago,
I’ve all but run out of words to describe my
continuing views on the market rhythm and trade opportunities, although “index
limbo” comes to mind.Â All timeframes above one-minute remain short as we head to
press and the VIX.X,as noted below, remains in a 13-minute uptrend, albeit
testing support at midday.Â Most readers know I don’t pay much attention to the
intraday VIX.X, except for a couple of times each year.Â Well, this is one of
those times.

So where does this leave us?Â Perhaps the best way to sum up my current view is
to simply suggest keeping the trade extremely close to the vest, meaning
continuing to seek entries as close to trade premise support as possible, and
locking in quick intraday profits with tight trails.Â Why?Â Because given the
current market emotion, this market could snap hard in either direction at any
time, resulting in either capitulation or a 2002-like rocket reversal, and I
prefer risk-avoidance more than profit-positioning in such times.Â In other
words, say you were on the other end of a two-foot bungee cord, and I backed up
about 10 feet — hopefully, you get the picture.

Suffice it to say the 13 and 60-minute charts remain tailwinds at traders back,
with the current question being: “How much fuel is left in the tank?” Should we
turn up on the three and thirteen, there may be sufficient contra-hourly long
profit potential before running into hourly resistance, yet you hopefully know
by know my views on the hourly chart and it would be a bounce trade only.

ES (S&P)Â Â Â Â Â
Thursday February 13,Â 2003Â 12:00 PM ETÂ Â Â Â Â Â Â NQ
(Nasdaq)