VIX - an Alarming pattern for US equity markets
VIX is the VOLATILITY index.
Officially called the CBOE Volatility Index and listed under the ticker symbol VIX, investors and analysts sometimes refer to it by its unofficial nickname: the fear index.
"Technically speaking, the CBOE Volatility Index does not measure the same kind of volatility as most other indicators. Volatility is the level of price fluctuations that can be observed by looking at past data. Instead, the VIX looks at expectations of future volatility, also known as implied volatility. Times of greater uncertainty (more expected future volatility) result in higher VIX values, while less anxious times correspond with lower values. Investors, analysts and portfolio managers look to the CBOE Volatility Index as a way to measure market stress before they make decisions. When VIX returns are higher, market participants are more likely to pursue investment strategies with lower risk...".
The chart of VIX has a possible alarming pattern because it had a move in 5 legs (A to E) which is probably giving now a spike up.
Trading the VIX is of high risk and only experienced traders should do so, but it has potential for a thrust up.
That move up, if it unfolds in 5 Waves as I expect, can push the VIX to 50-60 which translates in a sharp move down for US Indexes.
As I mentioned for the DAX chart, I will say the same for US equities: It is time to preserve Capital and not take risks.
Officially called the CBOE Volatility Index and listed under the ticker symbol VIX, investors and analysts sometimes refer to it by its unofficial nickname: the fear index.
"Technically speaking, the CBOE Volatility Index does not measure the same kind of volatility as most other indicators. Volatility is the level of price fluctuations that can be observed by looking at past data. Instead, the VIX looks at expectations of future volatility, also known as implied volatility. Times of greater uncertainty (more expected future volatility) result in higher VIX values, while less anxious times correspond with lower values. Investors, analysts and portfolio managers look to the CBOE Volatility Index as a way to measure market stress before they make decisions. When VIX returns are higher, market participants are more likely to pursue investment strategies with lower risk...".
The chart of VIX has a possible alarming pattern because it had a move in 5 legs (A to E) which is probably giving now a spike up.
Trading the VIX is of high risk and only experienced traders should do so, but it has potential for a thrust up.
That move up, if it unfolds in 5 Waves as I expect, can push the VIX to 50-60 which translates in a sharp move down for US Indexes.
As I mentioned for the DAX chart, I will say the same for US equities: It is time to preserve Capital and not take risks.
I had 50 to 60.
I am placing now 80 to 100