VIX
The VIX is also known as the Volatility Index. This is normally associated with fear in the market place. The higher the VIX, the more fear and thus the higher the volatility.
Taking a look at the daily and weekly charts of the VIX shows some interesting trends.
After hitting a low of 9.39 in December of 2007, it has been steadily rising after breaking out of a bullish downward wedge.
Recently it has been consolidating and appears to be on the verge of breaking out higher again.
This can be seen on both the daily and weekly charts. While there is a chance that this breakout will fail, if it does break out higher, we can expect much higher levels of volatility in the stock market which in the case of today's market, I would expect much lower prices for such indexes as the S&P 500, NASDAQ, and the DJIA.
Taking a look at the daily and weekly charts of the VIX shows some interesting trends.
After hitting a low of 9.39 in December of 2007, it has been steadily rising after breaking out of a bullish downward wedge.
Recently it has been consolidating and appears to be on the verge of breaking out higher again.
This can be seen on both the daily and weekly charts. While there is a chance that this breakout will fail, if it does break out higher, we can expect much higher levels of volatility in the stock market which in the case of today's market, I would expect much lower prices for such indexes as the S&P 500, NASDAQ, and the DJIA.
Labels: Fear, VIX, Volatility
posted by a at
3:03 PM
6 Comments:
Hello, Re: VIX
a ten year chart of the VIX seems to suggest that from 98 through 03 most of the VIX activity was in the 20-32 range, then the bubble started and the VIX slowly dropped to the single digits, then in 05 the VIX flattened out till 07 and then started moving back to the old channel, the last candle i have is 08 and right in the channel again...
just a thought
Mac
Mac,
Excellent input on the long term VIX. What do you think this portends for the future?
Regards,
Market Bust
Market-
The shadows of historical data are at best, difficult, we are in a event driven market, the problem at this point is "everyone is looking over their shoulder with their finger on the sell button, good news is being sold, bad news is being killed, if the VIX stays in this channel, there could well be strong winds ahead.
Rescue packages,,,Well, that is just more data..(More events)
Enjoy
Mac
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