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$VIX
Nov 28, 2023 22:47:46 GMT
Post by archer on Nov 28, 2023 22:47:46 GMT
We all know when the vix is high the market is more risky and when low the market is more bullish. And there are some who view a low vix as dangerously complacent. This morning Tom Bowley shared the chart below to quantify the annualized gain over varying VIX ranges. It might be hard to read the chart as it gets more blurred when you enlarge it. To summarize: VIX above 20, annualized return -36.74% 17-20 annualized return 15.29% 13-17 annualized return 30.97% <13 annualized return 47.26% While we are on the subject of the VIX, todays candle has quite the inverted hammer. Most of the long wicked candles on the vix appear to ocurre within a day or 2 of reversals.
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$VIX
Nov 28, 2023 22:52:59 GMT
Post by waffle2 on Nov 28, 2023 22:52:59 GMT
It is impossible to predict short term market directions.
But considering most all market gurus have been forecasting recession and a market fall for 2+ years now, why would people be complacent?
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$VIX
Nov 29, 2023 5:39:02 GMT
via mobile
Post by Norbert on Nov 29, 2023 5:39:02 GMT
We all know when the vix is high the market is more risky and when low the market is more bullish. And there are some who view a low vix as dangerously complacent. This morning Tom Bowley shared the chart below to quantify the annualized gain over varying VIX ranges. It might be hard to read the chart as it gets more blurred when you enlarge it. To summarize: VIX above 20, annualized return -36.74% 17-20 annualized return 15.29% 13-17 annualized return 30.97% <13 annualized return 47.26% While we are on the subject of the VIX, todays candle has quite the inverted hammer. Most of the long wicked candles on the vix appear to ocurre within a day or 2 of reversals. View AttachmentDoes Tom Bowley think the Vix has predictive value? I see that it has an inverse historical correlation with the stock market, but don't think it leads. I do think there's some utility in chart analysis, though favor looking at the market itself, not a derivative indicator like the Vix. Right now both the S&P 500 and Qs are flatlining, hesitating to break through resistance dating back to the Summer. Have no idea if they'll be successful, or not. (Click to enlarge.) uncleharley ?
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$VIX
Nov 29, 2023 6:15:25 GMT
Post by archer on Nov 29, 2023 6:15:25 GMT
Norbert , I haven't sensed that Bowley views the VIX as a primary indicator, but he does take it into consideration. For example with the current flatlining, a higher VIX could be indicative of a reversal. I agree with you that the inverse relationship seems to go in lockstep with the market rather than a leading indicator. Honestly I don't know of any leading indicators. They all seem to merely reflect the market. I use TA more as confirmation of supportive conditions for the market.
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$VIX
Nov 29, 2023 6:37:34 GMT
via mobile
Post by Norbert on Nov 29, 2023 6:37:34 GMT
That's an interesting observation, noting the combination of major index flatlining and rising Vix.
What concerns me is all the happy talk about an end-of-year rally based on seasonality and momentum. When there's consensus among retail investors, combined with chart resistance and somewhat high valuations, it's a bit tricky. I'm low conviction regarding up vs. down.
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Post by uncleharley on Nov 29, 2023 13:50:54 GMT
Declining interest rates are a reliable leading indicator of an expanding economy and the anticipation of declining interest rates are an indication of a rising stock market. A declining USD is a leading indicator of rising commodity prices. Again, the markets tend to anticipate those moves. There are lots of other leading indicators that work. The VIX is one of many. How well it works depends on the ability of an individual to make a good decision. None of them can anticipate an unforeseen, major disaster.
Currently the FOMC members are signaling or saying that the recent rise in the fed rate is over. The declining value of the USD seems to confirm that idea. The VIX is climbing on board. Fwiw, I am long, leveraged, & happy. We shall see if there is an unanticipated disaster lurking in the shadows.
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