In an era when the movement of speculative capital remains the effective means by which monetary "policy" is conveyed transformations in the consensus of faith in this wildly unbridled arrangement have been well documented by changes in the Volatility Index over recent years.
In the 2007-2009 period $VIX 30 coincidentally (or not) marked an absolute point where upon crossing, either higher (Sept 2008) of lower (July 2009), the market's trend subsequently was cemented.
Likewise, once $VIX 40 was crossed, the kiss of death: everything crushed. Something to keep an eye on over weeks ahead...
Seeing $VIX holding above 30 as prospective wave (2) of C completed on Wednesday is appreciating how well-poised is this moment for volatility's sudden increase in formation of wave (3) of C, whose five waves were detailed yesterday.
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© The Risk Averse Alert — Advocating a patient, disciplined approach to stock market investing. Overriding objective is limiting financial risk. Minimizing investment capital loss is a priority.
Analysis centers on the stock market's path of least resistance. Long-term, this drives a simple strategy for safely investing a 401(k) for maximum profit. Intermediate-term, investing with stock index tracking-ETFs (both their long and short varieties) is advanced. Short-term, stock index options occasionally offer extraordinary profit opportunities when the stock market is moving along its projected path.
Nothing is set in stone. Nor is the stock market's path of least resistance always known. More often than not, there are no stock index option positions recommended.
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