Read article here
If you look at this VIX chart closely, the spike up is fast and furious. And it is easy to enter late and missed the actions.
So, how does one know if the VIX chart which shows the collective fears of the investors/traders in the market is going to explode exponentially ?
Well, one way is to look at the PE ratio of SPX500 . You can see from this article that in 2009 , it spike up to 123 only to end up terribly thereafter. We are now at 45 PE ratio level. From the chart, we can see that at 25, it is the common resistance level where it has peaked since 1880.
Did you spot a potential Head & Shoulder pattern forming (right shoulder )? If this theory holds true, then we could possibly see it falling back to 25 level or less worse at 30 level.
If you are a short term or swing trader, you might want to consider take some profits and take a break before entering the market again.
Supporting this theory that the market is correcting sooner than later, we turn to Stock Trader’s Almanac prediction. Since 1987, the month of August has been a horrible moth to trade, brining down SPX500 and DJIA.
However, if you are a long term investor, then you should get ready your cash pile and identify good , fundamentally strong companies that are going on sale or fire sale soon so you can pick them up.
If you look at this VIX chart closely, the spike up is fast and furious. And it is easy to enter late and missed the actions.
So, how does one know if the VIX chart which shows the collective fears of the investors/traders in the market is going to explode exponentially ?
Well, one way is to look at the PE ratio of SPX500 . You can see from this article that in 2009 , it spike up to 123 only to end up terribly thereafter. We are now at 45 PE ratio level. From the chart, we can see that at 25, it is the common resistance level where it has peaked since 1880.
Did you spot a potential Head & Shoulder pattern forming (right shoulder )? If this theory holds true, then we could possibly see it falling back to 25 level or less worse at 30 level.
If you are a short term or swing trader, you might want to consider take some profits and take a break before entering the market again.
Supporting this theory that the market is correcting sooner than later, we turn to Stock Trader’s Almanac prediction. Since 1987, the month of August has been a horrible moth to trade, brining down SPX500 and DJIA.
However, if you are a long term investor, then you should get ready your cash pile and identify good , fundamentally strong companies that are going on sale or fire sale soon so you can pick them up.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.