SPX and VIX are both traded by people/bots so VIX is no means a better tool to predict the future. But people that trade VIX might have a better understanding of the market than people who just trade SPX alone.
The market recovered but how confident it is? Generally, when the market rises VIX falls sharply, I mean un-proportionally sharp. But when it doesn't, I can only suspect something is going out there.
yeah, i trade both and have been witnessing the same thing.. very suspicious action on the VIX, where each new high in spx causing a bid in volatility. vix is a monster to trade and i only trade it from the long side... that means i have to accept a decay rate of 10% per month (roughly).. but its a 250-400% winner if you are right. i heard an interesting term on a podcast recently, anti-bubbles. the one asset that has been pummeled during this ridiculous melt up has been volatility.. hugely artificially suppressed. so if you can buy vix at prepandemic levels, its worth some theta burn (decay) because it will explode higher on the eventual correction. i want to be short this market, but being actual short has been a recipe for disaster as it melts up to ridiculous levels. but now, vix has firmed up to the point where even as the market is making new highs, vix has stopped decaying.. this tells me we are close... very close.
sassyladydc
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Interesting! Thanks for this info. I’m new to trading and have been reading every article on my pairs. SPX is one of 3. I’ll make sure to add VIX to my watchlist
samitrading
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Nice piece buddy & thanks for sharing. wish yo the best.