Volatility versus Technical Analysis

(Observer's note: a good point made by Bill Luby. I really enjoy reading his posts now. The comment below is from his 4/14 post.)

...... To answer the question "Is the VIX Impervious to Technical Analysis. I have to say that I am largely in agreement on the three main points made in the post:
Support and resistance don’t matter
Long term moving averages don’t matter
Correlation does not imply causation"

"... ... Last but not least, Tom Drake has an indicator that he calls the 2CS, which combines the VXO (the original VIX, prior to the 2003 modifications) and the CBOE combined put to call ratio to get a two dimensional view of options sentiment. In The 2CS Revisited, Tom discusses how he uses the 2CS to help identify market bottoms. His approach appears to be similar to mine in many respects. Also, the 2CS is clearly a relative of the OSI (Options Sentiment Indicator) that I publish and discuss in my subscriber newsletter.

I suspect the increased interest in the VIX is a by-product of the ongoing discussion in many circles that the VIX has not spiked enough to signal a textbook capitulation bottom, particularly given the magnitude of the macroeconomic concerns. I continue to think that while a VIX spike of 40 or more would placate many of those who are waiting for a more obvious sign of capitulation, this is not necessary to confirm a bottom, particularly given the current trading range of the VIX in the low to mid-20s."