Vexing about the VIX? Here's my take...
It's saying the market could soon turn volatile. Consider $VIX momentum (bottom panel). It is climbing and about to cross its 0-line. As was previously observed, the market's counter-trend rally off March '09 bottom consistently has stalled whenever the Volatility Index's momentum turned positive.
Now, what are odds $VIX momentum is about to turn positive?
How much lower is $VIX likely to go?
The market could soon turn volatile. Case closed.
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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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