Friday, April 10, 2015

Eye on the VIX

The VIX is giving off signals here that bears will not like.  It closed at 13.09, which si quite low for not being at an all-time high.  The VIX was higher in late March when the S&P was also a bit higher.  When you have a VIX hitting near new lows while the S&P doesn't make new highs, it tends to be a bullish indicator.  On the other side, a higher VIX and a higher S&P is usually a bearish indicator.

In general, a lower VIX is not a bearish sign, especially when it is accompanied by an S&P that is not making new 52 week highs.  Options buyers and sellers that determine implied vol of put options are usually not dumb money, they usually are on the right side of the trade.

I should have paid more attention to VIX, but one set of eyes can't keep track of everything.  But this low VIX does set up a sell signal later, but it takes time, usually at least 2-3 weeks.

Cannot be a seller here, I am afraid we are back to the buy any 15 SPX points dip mode for the rest of the month.


Anonymous said...

Decent chance however VIX closes today below lower bollinger... usually triggers a short term reversal. But MSCI World on verge of breaking out after trying 5 times since June last year.

Anonymous said...

Hey man, what's your thought on Dollar here and the Euro.

Market Owl said...

I don't have a trade idea with EURUSD. If I had to make a trade, I would be long euro, but even with a bad jobs report, we are right back to 1.06 within a week.