When volatility falls to a low level Bollinger Bands are narriwing as you can see on the chart below. This is called the Squeeze. Usually periods of low volatility are followed by periods of high volatility. Narrow bands can foreshadow a significant move either up or down. Since VIX is already on low level this move most likely will be a move higher.
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The weekly chart below shows how VIX and MACD are slowly moving higher. Also notice that VIX touched the 200-period SMA several times during the past couple of years.
The "fear index" suggest that investors feel comfortable with the general market. From the chart below it looks like VIX will go even lower. The TRIX momentum oscillator and Aroon trend indicator reinforces this observation.
I put in a couple of trades recently and I'll show them in my virtual trading account. One of them is a VIX call option with September expiration. It didn't make as much money I thought it would but it still has some potentials. I also bought a GLD straddle. I am not too happy with that, I'll sell it. I expected a bigger move, but it still made some money. The best one is a SPY put with October expiration. I will definitely keep this one for a little longer.
VIX the volatility index could move higher soon. See the chart below with MACD and the 14 petiod StochRSI. It looks like MACD wants to cross above the signal line and StochRSI moved above 0.5.
The chart below shows the daily chart for $VIX, the volatility index with the Aroon indicator below the chart. Aroon-Up (green) is in the 70-100 range and Aroon-Down (red) is below 50. This tells us that $VIX is in an uptrend. That's is bearish for the Market.
VIX the "fear gage" spiked up today as the market moved lower. This could be the sign of a pullback or the start of a correction.
The 200-day moving average acted as resistance but notice that the MACD line crossed avobe the MACD silgnal line.
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