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Since actual trading levels of S&P are close to the support line and actual VIX Index quotes are far away to the top (Green Circles Level), would be better to expect another S&P bottom in the VIX's mid level (Blue Circles Level)???
I'm trying to understand this VIX/S&P Ratio behavior, so i look forward to get...
The level of VIX is very low. MArkets appear very confident and we can say over confident. However, as I have mentioned few days ago comparing VIX with DOWI, the are initial sign of a reversal trend. It is ofcourse too early, but one should keep in mind that STOCH, MACD as well as the move of the candles suggest that we may well be at the initial pahse of a bull...
Clearly this is unusual to see a market setback like this without any surge in the price of insurance for index options.
This tells us something big is happening:
Possible scenarios:
1. Mutual funds are just rotating cash out of stocks and into bonds and not hedging against their own selling = unusual.
2. Covered call mutual funds are selling massive...
Comparing today's VIX to that in 2005, if same pattern repeats (yes, a BIG if), the current bull market still has 2.5 years to go (to 2017, at 2450), a market trending up with increasing volatility and weakening RSI. Regardless the outcome, if one can simply follow the 10 month moving average, he should be doing alright IMHO.
When we do add DOWI and VIX charts one on the other, we can clearly see the correlation between the two indexes.
When the market is too BULL, VIX is at a very low level. VIX level is too low, and shows an overconfidence of the market. Immediatly a correction, that can be severe in deed is following. Putting a side the technical indicators, we may be able to...
Fib time says this and next week might of importance as time reaches 1,618 extension, if we connect the lowest closings of the last 12 months.
Attempting to break the falling wedge. If manages to closes above implications for VIX and indexes might be important to be aware of.
Cheers,
Panos
By the solid blue line represented S&P500 shows lower low and lower high in April .
Relation of VXV (CBOE S&P500 3-M Volatlity) and VIX (CBOE Volatlity) - candle chart - gives us information about the VIX term structure (VXV/VIX>1 => contango, VXV/VIX<1 backwardation). The lower the number, the higher the possibility of correction within 3Mo (by exhausting)...
OptieAcademy.nl went long @ $43.50 to hedge the stock portfolio. Idea publised at a level of $44.75. Our first target is $48 and second target is $55. Stop-loss below $42
