CBOE Volatility Index - VIX - Daily versus SPY (S&P500 SPDR)
Sharp DROPS IN VIX have always been RE-TESTED
1. Look for sharp drop in VIX after a spike (Note: This is usually accompanied by a rally in stocks) 2. As soon as there is a 75% retracement of VIX, mark the level of stock prices. 3. The market will revisit this level once the short-covering euphoria is over. 4. See all examples. The last one completely blew up.
So, It looks like this is a very reliable read on VIX and what it means for the future of the S&P500.
Tim 3:03PM October 21, 2014
NOTE: THIS DATA IS ONLY THROUGH YESTERDAY'S CLOSE - FOCUS ON THE OLD SIGNALS
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