Clearly this is unusual to see a market setback like this without any surge in the price of insurance for index options. This tells us something big is happening: Possible scenarios: 1. Mutual funds are just rotating cash out of stocks and into bonds and not hedging against their own selling = unusual. 2. Covered call mutual funds are selling massive...
Comparing today's VIX to that in 2005, if same pattern repeats (yes, a BIG if), the current bull market still has 2.5 years to go (to 2017, at 2450), a market trending up with increasing volatility and weakening RSI. Regardless the outcome, if one can simply follow the 10 month moving average, he should be doing alright IMHO.
When we do add DOWI and VIX charts one on the other, we can clearly see the correlation between the two indexes. When the market is too BULL, VIX is at a very low level. VIX level is too low, and shows an overconfidence of the market. Immediatly a correction, that can be severe in deed is following. Putting a side the technical indicators, we may be able to...
By the solid blue line represented S&P500 shows lower low and lower high in April . Relation of VXV (CBOE S&P500 3-M Volatlity) and VIX (CBOE Volatlity) - candle chart - gives us information about the VIX term structure (VXV/VIX>1 => contango, VXV/VIX<1 backwardation). The lower the number, the higher the possibility of correction within 3Mo (by exhausting)...