VIX 01 (Jun 09 - Oct 11)

[winston]

Weekly Review

VIX. The VIX fell sharply this week after the early-week issues. It gapped lower on Friday, recovered, but was still down on the session.

It is back down in this range where the market peaked out a bit and started to fall. That drove the VIX back up. We will see if it has the same effect.

As we look at the charts, you will note they are approaching those early-March peaks. Look where the VIX was when it was there. Very interesting.

VIX: 17.4; -0.34
VXN: 19.41; -0.33
VXO: 15.95; -0.5

Source: Investment House

[winston]

Weekly Review

VIX. The VIX was up 4.5% on the session, but that is no surprise. The market actually did sell, and there was a lot of fear.

There was a lot of lather and a lot of bogus fear in my opinion. In any event, the VIX is not showing any real danger that there is a major selloff in the works. A normal pullback?

Of course. We have been talking about the potential for a normal pullback, but this chart does not show anything major in the works.

VIX: 17.87; +0.76
VXN: 19.76; +0.42
VXO: 16.53; +0.97


Source: Investment House

[winston]

Weekly Review

VIX. There was a gap lower on Friday, and it took it down to the April 2010 level. That is coincident with other points from a long, long time ago, and a market far, far away. All the way back in 2004-2006.

What happened during those years? The market moved laterally, but then it rallied during this period. There was not anything negative about that. There is no negative connotation right now with respect to it touching this level.

It may try to signal an interim top, but right now there is not that kind of correlation between volatility and the stock market moves. It is not that really close correlation.

In any event, volatility can continue to fall for quite some time while the market rises. You have to worry when volatility rises while the market is rallying.

VIX: 15.32; -0.95
VXN: 17.48; -0.22
VXO: 15.3; -0.76


Source: Investment House

[winston]

VIX: 14.69; -0.38
VXN: 15.85; -0.64
VXO: 13.45; -0.82


Source: Investment House

[winston]

The Market Is Ready To Snap By Jeff Clark
Tuesday, April 26, 2011


I hate referring to the "flash crash." Too many people do it, and it seems a bit inflammatory to keep saying one indicator or another is signaling another dangerous market event. But this one is staring us in the face and begging to be noticed.

The action in the Volatility Index (or "VIX") is eerily similar to what happened last year – just before the flash crash.

The VIX is a measure of fear in the market. It's used as a contrary indicator. So when the VIX is low, it signals investor complacency and warns traders that sentiment is too bullish. When the VIX is high, it indicates traders are fearful and we may have a buying opportunity.

One of the most consistent warnings of an impending correction occurs when the VIX closes below its lower Bollinger band and then rallies back within the bands.

For example, here's how the VIX looked in the early months of 2010...

The blue lines on the chart are Bollinger bands. They outline the most probable trading range for the chart.

Whenever a chart travels outside of its Bollinger bands, it indicates an extreme move – kind of like stretching a giant bungee cord as far as it'll go. When the chart comes back within the bands, it often leads to an extreme move in the other direction – like releasing one end of an outstretched bungee cord and watching it spring the opposite way.

On January 11, 2010, the VIX closed below its lower Bollinger band. When it rallied back within the bands, it made a sharp move higher and busted out to the upside of its trading range. This coincided with a 7% correction in the S&P 500.

In mid-April 2010, the VIX once again closed below its lower Bollinger band. It soon rallied back within the bands. Three weeks later, we got the flash crash and the start of a 20% correction for the stock market.

Here's how the VIX looks so far this year...

Here again, the VIX warned of a correction in mid-January when it closed below its lower Bollinger band. The mild 7% correction that kicked off in February was similar to what we've seen before.

And we got another warning last week.

The timing is almost identical to last April's flash crash... so is the preceding action, the bullish sentiment among investors, the increase in margin debt, the lackluster volume, and any number of other indicators.

Of course, that doesn't necessarily mean the outcome will be the same. But do you really want to take that chance?


http://www.growthstockwire.com/2704/The ... dy-To-Snap

[winston]

Weekly Review

VIX. Volatility is quite low. It has broken below the levels hit from late 2010 and early 2011. That would seem to suggest that we are due for a pullback. The last time volatility broke below this level, SP500 had sold off. Then it rebounded and volatility has now faded after that selloff.

It bounced and now it has faded once again. The volatility has moved back down as the SP500 has broken to a new rally high. It suggests it might try to fall. It suggests that, but it is not a guarantee.

Interestingly, the markets were up on Friday and volatility was up as well. That is not typical movement. If you see volatility rise when the market rises, that is a warning flag. I am not saying it is a long-term bad signal.

It is just a near-term interesting feature that could indicate that the market is ready to pull back. Looking at SP500 and the length of the run it has made of breaking out, a pullback to test that move would be normal.

Do not get wrapped up when people are talking about the VIX and how it was up on a day that the market was up. It is not making those big runs higher. If it ran higher for three or four weeks with the market, that would be worrisome. Right now, it just suggests that the market may be overbought and may want to come back to test the move.

You always need to look at the charts when looking at volatility. You have to compare it to what is going on with the market itself. It looks like it could be due for a pullback.

VIX: 14.75; +0.13
VXN: 16.54; +0.34
VXO: 14.06; +0.52


Source: Investment House

[winston]

Weekly Review

VIX. As you would expect, as the SP500 started to sell off this week. On Monday it started back down and bounced on Friday. Volatility started to rise. It reversed and has started higher. This is exactly at the point where the market struggled a bit before.

Now we see the move higher. It is worrisome that on Friday when the market rallied, volatility rallied as well. Volatility should fall when the market rises. There are problems in history when volatility rises as the market rises. This is just one day, however.

I do not want to get bent out of shape about it, but it is something to watch. If volatility continues to rise with the stock market, that is something to watch out for. That is something more sinister and not just an ordinary short-term pullback. We will definitely be watching that in the week to come.

VIX: 18.4; +0.2
VXN: 19.26; +0.14
VXO: 17.76; -0.21

Source: Investment House

[winston]

Weekly Review

VIX. It was not spiking up on the day-to-day volatility in the indices. That is often what you see in a turn, and it is a part of the equation that many do not talk about. That back-and-forth action, day to day after a solid trend has been in place is just as indicative of a turn as is a sagging volatility index if there has been a strong run in the stock market.

We see a break higher and a higher low. We see a lot of intraday, day-to-day volatility in the VIX as well. It could be setting up for a selloff. This is not one that has been rallying necessarily with the stock market. This has been the inverse. These moves up were a move down in the SP500.

It is not doing the really scary stuff where it rises as the stock market rises. That is good, but what we are seeing is a higher low. We could be getting a break higher in volatility that is coincident with a stock market pullback.

VIX: 17.07; +1.04
VXN: 18.4; +1.41
VXO: 17.02; +1.23


Source: Investment House

[winston]

Weekly Summary

VIX. VIX is hugging the same level it did back in December, January, and February. That suggests perhaps the market could sell, but, as we have seen, it has not materialized into anything.

We are not seeing the volatility moving higher as the market moves higher. That would indicate something much more troublesome ahead.

It is matching the market right now, so I am not getting too wrapped up in that and what volatility is showing.

VIX: 17.43; +1.91
VXN: 18.16; +1.1
VXO: 16.41; +1.12

Source: Investment House

[winston]

Weekly Review

VIX. After a spike higher early in the week on the selling, it has come right back down to the same level it hit in December-February.

Recently we have had selloffs when it has come down to this level.

Thus we have a nice doji that tapped that horizontal support level on Friday, and it bounced.

After that 1-2-3 upside and a little bear flag, we could get a downside move on the indices next week.

VIX: 15.98; -0.11
VXN: 16.87; -0.39
VXO: 15.76; -0.23


Source: Investment House