VIX 01 (Jun 09 - Oct 11)

[millionairemind]

Strange that while SP500, NYSE and the DOW closed at a new low for the year, the VIX did not make a new high.

[kennynah]

monday....indexes will peo ....

i bet this to happen....hahahaha....like playing "大" or "小"

[winston]

MARKET SENTIMENT

VIX. Volatility on Friday thumped hard to the downside, coming down to the 50 day EMA and undercutting the lows over the past three weeks. What we saw in the original selling was the spiking higher of volatility almost to 48 before it started to peel back.

Rallies tend to start a few weeks after volatility hits its peaks, and it looks like volatility has hit its peak. We had one high, a higher low, a new higher high, and then another higher low. Now it is rolling over and getting a lower high and a lower low.

Some people who have been watching awhile may ask if that is an ABCD pattern forming. That could be the case, but typically volatility does not follow that pattern as stocks do. Nonetheless, I will be watching to see if it bounces higher. As I will discuss later, it looks as if the market is trying to make for more of a rally here.

We have broken the string of higher highs and higher lows in the VIX, and this allows the oversold bounce to have a bit more traction.

VIX: 28.79; -1.78
VXN: 28.8; -2.5
VXO: 27.9; -1.78


Source: MarketFN.com

[millionairemind]

Time for VIX to grind higher??

Seems supported by the 200DMA.

[winston]

MARKET SENTIMENT

VIX. Over the past two weeks, it has fallen straight down to the 200 day EMA. It broke below the peaks in January and February. It could bounce off of this level, but there are sharp peaks higher on the fear before it settles back.

It is classic action. The fear sets the stage for a bottom, and then the lateral move, the choppy trade, and the break lower as the actual rebound rally takes place that was set as a result of these high volatility numbers.

This week the second part of the bounce has taken off. That has driven volatility lower. It told us what would happen, and did a decent job of forecasting.

VIX: 23.95; -1.1
VXN: 24.15; -1
VXO: 22.53; -1.91

[winston]

Weekly Review

The VIX did bounce this week as the market sold off. Of course they move in an inverse relationship most of the time. There was a big spike higher over a month ago that set the stage for the rally.

VIX tailed off to the 200 day EMA, but it uncannily held that level and bounced as the market peaked and sold back. Now we will see if the VIX will stall out again as it looks like it is trying to do at the bottoms of the prior surges and tests, and send the market itself back to the upside.

VIX: 28.53; -1.21
VXN: 28.58; -0.51
VXO: 28.2; -1
Put/Call Ratio (CBOE): 0.89; -0.3

Source: MarketFN.com

[winston]

Weekly Review

Some very interesting action in the VIX we have been talking about all week. Tuesday it gapped as the market gapped lower on the China news. It peaked Thursday intraday at the early June peak and reversed. Friday it gapped lower and closed near the low on the day.

The import: as SP500 hit new lows for the year, VIX did not move to highs for the year. This action shows the highs have been hit for now and the market may just try to put in a quiet, and indeed quite unexpected, serious bounce.

No one expects it to do so, but that is when you look for it, especially when you see this kind of action in the VIX even as the indices sold hard to new 2010 lows.

VIX: 30.12; -2.74
VXN: 32.19; -2.37
VXO: 29.7; -3.22

Source: MarketFN.com

[kennynah]

given current european uncertainty....VIX at 30 hardly signals any fear in options market... rather, it seems to exhibit calmness...

[winston]

Weekly Review:-

The VIX has traded down to the 200 day EMA as the market rebounded over the past week. The notable feature is that the SP500 and NASDAQ hit new 2010 lows, but volatility did not hit new 2010 highs.
That was put in back in May with all the fear about Europe. That tells you that option traders are not pricing in the kind of volatility and fear they did in May, and they were expecting there to be more of a rally. We are getting that rally right now.

We have had a heck of a rally on the indices with the Dow, for instance, putting in its best weekly move in a year. Will it continue? We have volatility at the 200 day EMA, and it is slowing down. The question is whether the market will be able to continue if volatility bounces.

This is the point where there may be some struggling that frustrates investors and could lead them to believe that the oversold bounce has ended. I expect volatility to bounce a bit as the stock indices fade to start next week. That would be before a continued run into earnings and expiration Friday.

We may get a head fake, a bounce, and then it can break through the 200 day EMA and come back down to the levels hit in April. The important thing is that the volatility did not move to a new high as the indices moved to a new low. That told us that the market was improving and there would be an oversold bounce. The question now is how far that bounce will go.

VIX: 24.98; -0.73
VXN: 25.99; -1.06
VXO: 23.54; -1.22


Source: MarketFN.com

[millionairemind]

Are we ready for a bounce????