d1-invdn-com.akamaiz...d6ac9bcae0f8b553.pdf this link can explain the implied correlation indices (ICJ, JCJ, KCJ) in detail better than I ever could but essentially they measure the correlation between the implied volatility /prices of options on an S&P 500 index like $SPY and the IV/prices of options on the individual components in the SPX . The way I see it it is a measure of overall market risk. When the correlation indices spike it can be an indication that the market expects a general market downturn.
Late last month there were a couple days where these indices did not produce any data for the day which I thought was weird so I looked back and found a few instances in the past where this sort of funky no change in either index thing happened (blue lines). Each time the SPX saw a correction at least 10% within the next 30 calendar days.. They were also usually preceded by a general decline in the percentage of stocks above their 200 and 50 day moving averages like we are seeing now.
This could be an indicator of a sizable correction coming within the next week or so, and it could also be absolutely nothing.
I've just been looking for something useful to post on here because I do believe the stock market will eventually come back to reality and imo we are close. Good luck!
Late last month there were a couple days where these indices did not produce any data for the day which I thought was weird so I looked back and found a few instances in the past where this sort of funky no change in either index thing happened (blue lines). Each time the SPX saw a correction at least 10% within the next 30 calendar days.. They were also usually preceded by a general decline in the percentage of stocks above their 200 and 50 day moving averages like we are seeing now.
This could be an indicator of a sizable correction coming within the next week or so, and it could also be absolutely nothing.
I've just been looking for something useful to post on here because I do believe the stock market will eventually come back to reality and imo we are close. Good luck!