Is now a good time to buy?

[dubmac]

In this forum, we have threads devoted to "what are you buying" and "what are you selling", and I am wondering whether the forum has an interest in following market sentiment - which is a vague reference to "Are we at the bottom yet?"

I found this site, which calculates the VIX and posts the results chronologically.
http://www.marketwatch.com/investing/index/vix
When one evaluates the VIX over a year, we hit 50 in August 2011, and 100 in March 2009.
Today, the VIX is at 26 (not terribly high, but gained 10 pts and rising.

For a DIY investor, I am wondering whether this "barometer" of investor sentiment, along with some indictor of trading volumes (ie: when trades start to increase dramatically). I'm reading/researching more on it, but wonder what your thoughts are in using this measure. Does anyone use this? Is this something to share on a regular basis?

[andrewf]

I'm holding off. Timing the bottom is a fool's errand. It is easier to get in after the recover begins.

I like Yahoo Finance for historical VIX info. Try ticker ^VIX. I don't think VIX will tell you the bottom, but it gives a sense of how concerned the market is.

[Belguy]

The VIX is now at it's highest point in 5 months as fear rises.

[Cal]

I tend to pick my buy price and stick with it. If the marekt drops enough for my low price targets to get hit great.

I am buying...but for the same reason as andrew. Timing the market is a fools game. Happy to buy on sale, whether I get the best deal doesn't concern me too much.

[Mike59]

In this forum, we have threads devoted to "what are you buying" and "what are you selling", and I am wondering whether the forum has an interest in following market sentiment - which is a vague reference to "Are we at the bottom yet?"
.....
For a DIY investor, I am wondering whether this "barometer" of investor sentiment, along with some indictor of trading volumes (ie: when trades start to increase dramatically). I'm reading/researching more on it, but wonder what your thoughts are in using this measure. Does anyone use this? Is this something to share on a regular basis?

I agree with others who say the bottom is very hard to time...
I start to get excited as the VIX rises and begin dollar cost averaging into funds that are beaten up, and prefer to do the opposite of what most investors are doing.

If we look at the TSX and compare to the early 2000's or 2008, it's not bloody enough yet. I like using moving averages, the MACD and RSI as indicators of how weak things are, IMHO we're getting close to a good time to start dollar cost averaging in but I'm sitting on the sidelines before buying any new equities. Mean reversion can be a very powerful force, but the downturn looks like it's just getting started.

[kcowan]

Mean reversion can be a very powerful force, but the downturn looks like it's just getting started.

That is what I believe as well.

[ddkay]

I think this is a good time to start accumulating again and sell on the way up. I expect ES to turn up here or around 1250 and reach for 1500. Could be wrong though. Waiting for ES to get above 1330 may be a safer way to play the long side. CNBC is starting their loony 'markets in turmoil' specials again so I think markets are due to see another bail out/stimulus/cocaine fix. As usual the effects will wear off in a few months time and we'll be back where we started.

[dubmac]

I like using moving averages, the MACD and RSI as indicators of how weak things are, IMHO we're getting close to a good time to start dollar cost averaging in but I'm sitting on the sidelines before buying any new equities.

Where do I find / learn more about the indicators that you refer to above? The MACD & RSI indicators. Having learned some things in the past about trading, several on the forum watch for sigificant changes in volume - Is there an indicator (on the TSX) that is significant in establishing a turn in market sentiment wrt the volume of shares traded on the market?

[blin10]

don't go all in, but picking up nice divi companies on a way down slowly is what I'm doing... you will never catch bottom

[Mike59]

Where do I find / learn more about the indicators that you refer to above? The MACD & RSI indicators. Having learned some things in the past about trading, several on the forum watch for sigificant changes in volume - Is there an indicator (on the TSX) that is significant in establishing a turn in market sentiment wrt the volume of shares traded on the market?

http://www.investopedia.com/terms/m/macd.asp should be a good starting point

The most useful indicator IMHO to gauge the turnaround would be the "margin debt" statistic from the NYSE if you dig deeper to learn how that works. The only problem is that the figures are reported 1-2 months after the fact. But in the macro, it tells us that the market likely peaked a couple of months ago. Cyclical bears can last many months like it did in '08, so I would be very skeptical of anyone telling you the bottom is in.

I buy every single month and spread it out over at least once per week, so I don't pay attention to volume at all, but try to time my purchases based on some of the technicals.

I believe that the TSX is essentially a slave, subservient to the US market. So aside from the technicals I would still carefully watch the US economy, S&P and Dow carefully when purchasing the TSX.