logo
  Join        Login             Stock Quote

Volatility Index Settles Into a Channel

 April 10, 2008 01:59 AM


The VIX (Volatility Index) has now formed clear and distinct channels from which to assess current conditions.

I found drawing trendlines on this chart to be difficult, and you may have your own method for drawing a trend channel, so be aware of this when looking at this chart.

Right now, the VIX seems to be contained within 32 to the upside and 23 to the downside. If this is correct, then the VIX has either broken slightly to the downside of the channel, or is set to reverse back to the upside.

[Related -Initial Jobless Claims Rose Unexpectedly]

Keep in mind that the VIX is said to measure ‘fear' in the marketplace, as it measures the implied volatility of index options (specifically the S&P 500). Higher VIX prices correlate with lower prices in the index, but more specifically large volatility (often downside) moves.

What this means is, IF the VIX is testing the bottom of its trend channel, and IF the VIX reverses to the upside after testing this level, THEN we would expect to see higher volatility and (potentially) sharply lower US Index prices.

Keep in mind that the Markets have bounced up against resistance and are forming a potential consolidation triangle, meaning a large volatility move is not out of the realm of possibilities.

I recommend studying and learning more about this important index and what it might mean for the broader market.

iOnTheMarket Premium
Advertisement

Advertisement


Comments Closed


rss feed

Latest Stories

article imageInitial Jobless Claims Rose Unexpectedly

Claims unexpectedly rose in the latest report through last weekend to breach 300,000 for the first time read on...

article imageAll Quiet on the Record High Front

What can we glean from the media’s lack of attention to the market’s recent record read on...

article imageThe Chip Maker Short Sellers Should Be Watching

Investing in semiconductor stocks is always tricky. Industry cycles can lead to bumps in the road for the read on...

article imageChicago Fed: US Economic Growth Slowed In October

The pace of US growth slowed more than expected in October, according to this morning’s update of the read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.