VIX vs SPX monthlyVIX vs SPX, monthly chart.
Large spikes after a sustained and controlled downside wedge end up with big crashes on the stock index
VIX CBOE Volatility Index
VIX breaking the wedgeBroken the long term wedge (since 2020). These breakouts normally come with big corrections on the SPX
#VIX fear index and what it means with all its dates#VIX 1M chart;
The VIX (Volatility Index) is an indicator that measures the expected volatility of the market and is often referred to as the " fear index ".
In short, low values indicate a calm market, while high values indicate a tense market with higher stress levels.
By the way, this chart is mainly used by those who trade in the options market.
So what's it going to do for us? Let's see.
The VIX is usually inversely correlated with the S&P 500 index. In other words, it is negatively correlated.
When is the VIX chart triggered?
* Financial crises and economic uncertainty.
* Major corporate bankruptcies or scandals.
* Geopolitical tensions and war threats.
* Large-scale events such as natural disasters or pandemics.
* Major central bank decisions and interest rate changes.
The dates and events I have indicated in the chart;
* October 1998 : Russian debt crisis and the collapse of the Long-Term Capital Management (LTCM) hedge fund.
* July 2002 : Dot-com bubble burst and accounting scandals (Enron, WorldCom).
* October 2008 : Global financial crisis, bankruptcy of Lehman Brothers.
* May 2010 : Flash Crash - a sudden and massive drop in the US stock market.
* August 2011 : US credit rating downgraded.
* August 2015 : China's economic slowdown and market volatility.
* February 2018 : Inflation fears in the US and a sudden drop in stocks.
* March 2020 : The shock of the COVID-19 pandemic on global markets.
* August 2024 : Bank of Japan's first rate hike in many years.
Here are the details of what two of the above terms mean and why they may have an impact on the markets;
What is a Flash Crash?
On May 6, 2010, an extraordinary event occurred on the US stock markets that lasted only minutes, but caused severe price fluctuations and sudden drops in market values. During this event, the Dow Jones Index fell by about 1000 points in a few minutes and recovered shortly afterwards. It became clear how unprepared the markets were for such an extraordinary event. This continued the domino effect.
Who is Lehman Brothers? Why would its bankruptcy have an impact on the markets?
Lehman Brothers was considered one of the most prestigious investment banks on Wall Street, with a huge influence around the world. Therefore, we can say that such a bankruptcy during the 2008 real estate crisis had the effect of throwing fire on the global markets.
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My expectation of $vix In my previous #vix ideas i highlighted " something big is cooking" . Yes something big is happened in #nikkei , but i warn you now " something huge is cooking" . NOT FINANCIAL ADVICE.
VIX historical data analysisHistorical data over the past 10 years shows that VIX bottoming phase usually lasts no more than 168-193 trading days. After that, a significant spike occurs, which sends the VIX to the 35-80+ zone. Even if today was not the starting point of this upside move, there is not much time left. We have already passed 172 trading days. Take this into account before establishing new positions. The date range where the VIX peak should occur is mid-March to mid-May.
The Unlikely But Possible Has Occurred!Yeah, it's bad. But is it really as bad as everyone thinks it will get? I don't think so. I'm going to explain why I think this is just a brief discount window before a bigger pump through the year-end.
Update: VIXIts been a while but those who follow me know I posted extensively about the VIX months back and as we can see, the VIX is very much in the news lately due to its current historical spike.
It was not one of the more popular topics at the time I was talking about it but as you can see on this chart outlined here, that this is an extremely powerful resource and should be one of my most popular posts in my opinion.
The VIX was and still is highly accurate in regard to being an indicator of when to be risk on vs risk off. The levels I drew have been respected for the last few years perfectly and historically after we've seen sudden spikes, they were short lived and the index came back down to levels that were very friendly to bulls. Historically, the last time volatility was at this level, Covid Pandemic had just happened. Shortly after markets rallied 100% before finally entering a bear market TWO YEARS later.
In the coming weeks keep an eye on the VIX to see if it returns back below 15 basis points in that sweet Buy and Hold area that I have labeled on the chart.
VIX Spike to 'Covid' Crash Levels... What Happens NextThe last time the VIX spiked this high was during the March 2020 Covid 'Crash' which was followed by an epic Bull run after that, and proved to be one of the best buying opportunities.
With Japan's unwinding of their 'Carry Trade' and overall US stock market correction, the FED is likely to do an emergency rate cut this month.
And the US elections are coming up, which likely means QE to prop up the economy, as the the next liquidity cycle begins...
So this could be a great signal to flip back to Bullish in the crypto markets.
Fear and Greed is also down to 25, which is another good indicator of sentiment reverting to the mean and back toward Greed sooner than later.
I'm buying, and happy my limit buy orders from yesterdy for SOL at $115, $120, and $125 all filled today and already are in profit.
NASDAQ-100 (BIGTECH) VOLATILITY INDEX. IMPORTANT LEVELS TO LEARNBroadly-known ominously among investors as the "fear index" and launched by the Chicago Board Options Exchange (now the Cboe) in 1993, the Volatility Index (VIX) is meant to present the market's expectation of volatility over the coming 30 days. The metric is derived from options prices on the S&P 500 Index and captures the anticipated swings that drive investor sentiment.
In recent years, the VIX has become a far more central index, especially during periods of financial turbulence, such as the 2008 financial crisis and the COVID-19 pandemic. During these stretches, spikes in the VIX reflected widespread anxiety; during others, it's been a crucial barometer for market participants seeking a glimpse into investors' collective psyche. When the VIX is low, this suggests calm seas ahead. When it spikes, it signals approaching storms.
Every single stock index do have its own volatility. This story is about Cboe NASDAQ-100 Volatility Index
The Cboe NASDAQ-100 Volatility Index (VXN) is a key measure of market expectations of near-term volatility conveyed by NASDAQ-100 Index (NDX) option prices. It measures the market's expectation of 30-day volatility implicit in the prices of near-term NASDAQ-100 options. VXN is quoted in percentage points, just like the standard deviation of a rate of return, e.g. 19.36. Cboe disseminates the VXN index value continuously during trading hours.
The VXN Index is a leading barometer of investor sentiment and market volatility relating to the NASDAQ-100 Index.
Learn more about Methodology for Calculation of the VXN Index, using official CBOE website .
Technical observations
The main technical graph indicates that VXN Index has recently jumped, from 5-year lows around 15 basic points in mid-June, 2024 to current 25 basic points.
In nowadays 25-level corresponds to 5-years SMA, and is the major one resistance level.
In any case of breakthrough it certainly cracks the door to 40-levels and potentially even much above.
Think twice. Then leap.
Cheers, Pandorra
Highest level of fear after 2008 and CovidThis is insane.
We're in the highest level of fear after 2008 crisis and Covid pandemic.
Let's see what will happen.
VIX | Economic, Geopolitical, and Market DevelopmentsTVC:VIX
Key Points:
FOMC Decision:
Rate Hold: The FOMC maintained the federal funds rate at 5.25%-5.50%, indicating caution due to persistent inflation (Home) (Home).
Market Volatility:
VIX Surge : The VIX rose to 23.38, reflecting increased market fear and uncertainty driven by economic and geopolitical factors (Home).
Japan's Economic Challenges:
Policy Adjustments : The BOJ raised rates and ended yield curve control but maintained a relatively accommodative stance due to muted inflation.
GDP and Inflation : Japan's GDP contracted by 0.5% in Q1 2024, and core inflation stood at 2.5% year-over-year.
Europe's Economic Landscape:
ECB Rates : The ECB's interest rate is at 3.75%, with slow growth expected amid ongoing inflationary pressures.
Geopolitical Tensions:
Iran-Israel Conflict : Escalating tensions impact global oil prices and market sentiment (Council on Foreign Relations).
Russia-Ukraine War : The conflict continues to pose significant geopolitical risks, affecting global markets and humanitarian conditions (S&P Global).
US-China Relations : Ongoing strategic competition and trade tensions shape global dynamics (EL PAÍS English).
Cybersecurity Threats : Increasing frequency and severity of cyberattacks threaten national security and financial stability (S&P Global).
Global Elections:
2024 Elections : Major elections in the US, UK, and EU contribute to geopolitical complexity, potentially reshaping policies and market responses (EY US).
Summary:
The global economic and geopolitical environment remains volatile. The FOMC's decision to hold rates reflects caution amid persistent inflation. Market volatility, indicated by the VIX surge, is driven by economic concerns, geopolitical tensions, and mixed corporate earnings. Japan faces economic challenges despite policy adjustments, while Europe contends with slow growth and inflation. Heightened geopolitical tensions, particularly the Iran-Israel conflict and Russia-Ukraine war, alongside significant upcoming elections, add layers of complexity for investors and policymakers.
$NVDA heading toward critical support / LONG ENTRY @ SUPPORT NASDAQ:NVDA shares have traded lower after touching on previous target ($!40) highs.
Expecting the potential for more draw-down to $95 - $97, which keeps us at the midline for trend support (bullish).
Eyeing long opportunities at that support level, with firm stop-loss below.
Expect volatility with the TVC:VIX exploding to $29+ in today's trading session.
I am long NASDAQ:NVDA with a $32 cost basis..
Currently holding 3/25 expiration $130 calls with a 20% ROI, so far.
VIX $2.9 Trillion wiped on recession fears. Is the worst over?The much lower than expected Nonfarm Payrolls today (114k against a 176k forecast) amplified the global recession concerns and wiped out $2.9 trillion from the stock markets, making it the worst day since the 2020 COVID crash.
With Nasdaq down almost -12% from its recent peak, investors are more or less convinced of the necessity of a September Fed Rate cut in order to restore confidence in the market. But is the worst over yet?
Well, lets take a look at the Volatility Index (VIX), which last time we analyzed it (April 16, see chart below), helped us take the most optimal buy entry on the stock market as it got rejected right at the top of its 10-month Channel Down:
Today VIX was up almost +90% from its daily Low, displaying enormous market volatility. It is useful in times like these to look at the multi-year price action in order to keep an objective technical perspective.
As this 1W chart shows, a VIX price this high is a rare feat since the 2008 Housing Crisis. In fact the break-out above the Channel Down resembles the Highs of December 24 2018 and October 13 2014 (blue circles). Those that been the lowest levels of alerts on the VIX scale, with the medium ones being the orange circles and the worst ones being the red (only happened twice: October 20 2008 and the COVID crash of March 16 2020).
At the same time, the 1W RSI just broke above the 70.00 Overbought barrier, which has only happened another 6 times since the 2008 Housing Crisis. It is easy to understand as a result, that this VIX spike has more chances to be corrected in the coming weeks than ending up in a larger stock market correction.
On our current chart, the stock market is represented by the S&P500 (black trend-line). As you can see, a strong recovery (green Channel Up) followed after the blue VIX peaks. In the event however that this turns out to be an orange VIX peak next week, the S&P500 is expected to start recovering within 4-6 weeks.
Which case do you think it will be?
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VIX vs Autofib StrategyAutofib seems to do bad for the VIX index on red market days. As always, none of this is investment or financial advice. Please do your own due diligence and research.
Bitcoin vs VIX - Good LuckThis is a correlation between BTC and VIX.
Every time VIX breaks out marks the top in bitcoin.
VIXWhat should happen to press buy bottom?!
Green area is the best area to buy VIX and sell between 25 to 35...
The Fear Index and Geopolitical TensionsIn an era marked by geopolitical tensions and economic volatility, the fear index emerges as a crucial tool for traders seeking to navigate turbulent markets. This article delves into the historical significance of the fear index, exploring pivotal moments like the Cuban Missile Crisis, the 1973 Oil Crisis, and the 2008 Financial Crisis. By understanding how investor psychology and market sentiment intertwine with the fear index, traders can gain a competitive edge.
In today's world, marked by unprecedented geopolitical tensions, understanding the fear index has never been more crucial. As global conflicts escalate, the fear index provides essential insights into market sentiment and helps risk managers navigate through these turbulent times.
A Geopolitical Powder Keg
We are witnessing a convergence of significant geopolitical events:
Russo-Ukrainian Conflict: Ongoing hostilities have far-reaching implications for global stability.
Middle Eastern Volatility: Potential for a full-scale war involving major powers like Israel, the U.S., and Iran.
Sino-Taiwanese Tensions: Threats of a Chinese invasion of Taiwan with severe repercussions for the semiconductor industry and global economy.
Pro-Palestinian Protests: These could escalate into widespread violence, further destabilizing the political and economic landscape.
The Role of the Fear Index
The fear index, often measured by market volatility, acts as a barometer of investor sentiment in the face of these geopolitical risks. By closely monitoring the fear index, risk managers can gain early warnings of market disruptions and develop strategies to mitigate potential crises.
Historical Context
Historical precedents show how the fear index responds to geopolitical tensions:
Cuban Missile Crisis (1962): Stock markets plummeted due to heightened anxiety, underscoring the impact of geopolitical events on market sentiment.
1973 Oil Crisis: The Arab-Israeli War and subsequent oil embargo led to global economic downturns, reflecting the fear index's potential spike during such crises.
9/11 Attacks: The fear index surged as markets reacted to the unprecedented nature of the terrorist attacks.
2008 Financial Crisis: Global financial instability caused a dramatic increase in the fear index, providing early warnings of the impending market collapse.
COVID-19 Pandemic: The pandemic's economic halt saw the fear index spike, signaling early disruptions.
Methodologies for Calculation
Understanding how the fear index is calculated enhances its utility:
Volatility Indexes (e.g., VIX): Measure implied market volatility.
Sentiment Analysis: Assess sentiment through news and social media.
Investor Behavior Metrics: Analyze options trading and margin debt levels.
Combining these approaches offers a comprehensive view of market fear in response to geopolitical tensions.
The Psychological Impact
Investor behavior during geopolitical crises is influenced by:
Loss Aversion: Heightened sensitivity to potential losses.
Herd Mentality: Following the crowd amplifies reactions.
Availability Heuristic: Overestimating the probability of easily recalled events.
Strategic Applications
Risk managers must adopt a holistic approach, integrating the fear index with geopolitical and economic data to develop robust contingency plans. While the fear index can't predict crises' exact timing or magnitude, it provides valuable early warnings to prepare for potential disruptions.
Conclusion
The fear index is indispensable for navigating today's geopolitically charged environment. By monitoring market sentiment and identifying emerging trends, you can protect your investments from unforeseen events and build resilience. Embrace the insights offered by the fear index to stay ahead in these volatile times.
THE MOVE iNDEXit measures the price liquidity and volatility of the bond or market
could be the FLOW of FUNDS ahead of the underlying assets in the OPTiONS market
a crystal ball that provides you a 3 week headscarf to POSiTiON scale in or out of your beloved PETS
#VIX prediction for next weekAs can be seen, the price appears to be completing a triangle pattern, which could be interpreted as wave 2 or wave b. Either way, we could expect another rally to complete wave 3 or c.
This analysis is triggered once the price breaks above the previous high, and any bearish retracement could be a buying opportunity.
Let me know if you would like me to publish an analysis in a lower timeframe on this chart to take advantage of this rally.
VIX 20 years Later !What will fuel this next Bull Market?
#AI and exponential gains in productivity seem like a fair bet.
The technology won't manifest properly in the next few years of course.
But the speculation and new companies will.
20 years ago we saw the trendline of the #VIX break
coming out of 9/11 and right around the time of the Iraq war
Military spending, Lowering of rates, a Housing boom , and the rise of Google and culminating in the iphone.
Seems eerily similar to the current #macro environment
Long $UVXY 6x- 20x gains ahead?Finally got the reversal I've been looking for in $UVXY.
My entry was at $23 and I think we have a large move ahead of us. If we look at the chart, we have our first green flat bottomed Heikin Ashi candle.
Normally with a move like today's people are exiting puts and shorting UVXY, but I think this move is just starting and vol is about to become unpinned.
Over the coming 1-2 months, I think we can see 6x-20x gains through UVXY.
I'm looking for price to test at a minimum the $168 level and reach a potential high of $457.
I'll start taking profits in the $168-242 range and see if we can get all the way up to the top of the range.
Playing this both through a large spot position and through options.
Let's see what happens in the coming months.
How to read the VIX properly
This video explains the VIX indicator, how I use it to guide my trading decisions, and my perspective on the market. You can download the TradingView indicator for free, as it is open-source. Additionally, I'll provide a link to my Thinkorswim version in the YouTube video description. The VIX is an excellent tool for market guidance, based on options trading activity 30 days out on the S&P 500. It indicates market fear when it rises due to increased options buying and selling. Thank you for watching! If you have any questions or comments, feel free to share them—I enjoy discussing these topics. No indicator is perfect, but I use this one daily to gauge the market.
Macro View Shows 2-4 Month Max And Then It Starts!Traders,
Some rather ominous signs are showing in various markets not least of which includes the U.S. housing market. As you know, we have been periodically tracking the USHMI as a key leading indicator to show us where and when our coming U.S. (perhaps global) recession begins. We are close if we have not already begun, but I imagine there will be no ability for denial in about 2-4 months time. Before then, markets may continue to blow off and I still expect Bitcoin to hit our 85k target. Today we'll review our USHMI chart along with other key charts for further clues mapping future trajectory.
