Stock Market VIX Analysis :: The Market Oracle :: Financial Markets …
Stock Market VIX Analysis
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VolatilityJul 22, 2014 – 03:32 PM GMT
By: Ed_Carlson
The CBOE Market Volatility index, or VIX, is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. The VIX moves inversely with equities so that when equities are rising, the VIX is falling and vice versa.
Important (and not so important) highs in equities usually arrive with a positive divergence in the VIX. A positive divergence occurs when the VIX leaves behind a higher low while equities print a higher high. We would normally expect the VIX to print lower lows (per the inverse relationship) as equities rally higher.
The VIX also appears to have a seasonal pattern. While not perfect, the VIX tends to rally during the period between the first of July and the end of October. These VIX observations seem to confirm the Lindsay forecast given in last week’s article.
Get your copy of the July Lindsay Report at SeattleTA.
Ed Carlson, author of George Lindsay and the Art of Technical Analysis, and his new book, George Lindsay’s An Aid to Timing is an independent trader, consultant, and Chartered Market Technician (CMT) based in Seattle. Carlson manages the website Seattle Technical Advisors.com, where he publishes daily and weekly commentary. He spent twenty years as a stockbroker and holds an M.B.A. from Wichita State University.
© 2014 Copyright Ed Carlson – All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.
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Stock Market VIX Analysis :: The Market Oracle :: Financial Markets …
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