7 replies to this topic

[CLK]

I wouldn't put too much weight in lower VIX or relative VIX here. Somebody pointed out the reason and I agree.

 

The question was:  "Can anybody explain why VIX is so low given the support is broken, or at least close to being broken?"

 

 

" My take is that accumulation stopped in January '18, followed by distribution until September '18, where the pros sell to the retail investors. Therefore smart money is underhedged and already out of equity options, no fear there. This article agrees that a lowish Vix is not always good for equity."

 

 

https://www.marketwa...auge-2018-11-16

[q4wer]

I think that bear market started already

[CLK]

The trend is down but Monday is set to bounce, imo with 15 min. double bottom on divergent NYAD. Probably 30 points at most then back down.

[Data]

VIX measures volatility of the price within a range.   Since the market is consolidating at the lower end of the trading range, the VIX will stay relatively low.  You saw that during 2008 when the VIX fell from fall of 2008 to the March market low of 666.

 

Here is a critique of the indicator.

 

https://stockcharts....xvix-ratio.html

 

Most charts I've seen only use it since 2013 when the market was rising.  You can get the same result by applying trading bands against the SPX and the VIX or an longer-term oscillator.

[tradesurfer]

So then what would it take for vox to explode up from here ? I guess REAL fear

[SemiBizz]

In the cockpit we have a way of dealing with BROKEN INSTRUMENTS, like the $VIX - we place a patch over the instrument and it is ignored, and we replace the output using "workarounds"...  Until the performance of that instrument either returns to normal on it's own or is fixed.  When you fly on broken instruments, you get into big trouble, like smacking into a mountain or diving into the sea, like that 737 Max did in Indonesia the other day... in that case, the instruments and systems worked as designed, but the operators were uninformed and untrained on them, causing them to lose control of the airplane...

 

Just delete it from your quote screen, because it's not behaving properly... you can look in hindsight to see if it recovers and you can add it back to the instrument panel.

[beta]

I see $VIX in an uptrend since early Oct, trianguling on 60-min chart i.e., poised for a big move.   The fact that $VIX has not spiked yet makes me think wave "3" (when $VIX peaks occur) is still out there ...  meaning, that if/when there is a significant bounce, it will be from much lower levels.

 

In general, I concur with other observations that MACD and other indicators are not behaving "normally."  I seem to recall TT sages remarking years ago that once you transition from a bull to a bear market, your indicators no longer function the same.

[qqqqtrdr]

The big question is are we going to be in the middle of wave 3 next week, or we looking to hit a bottom here...   We'll need to wait and see what happens...  Looking through everything, I think we head higher this week. It looks like there are still too many pessimists out there betting against the market to keep the market down next week.