Always consider hidden risks
VIX and SP500: From a Fearless Market to Pricing Panic ?
August 25 ( From TradingView, SPYETF, CNN Money )
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In times of almost zero confidence from investors and speculators, it is interesting
to check the relationship between the VIX index and the SP500.
The spot VIX closed On August 24 at 40.74, well above the average
long term volatility level( the 200 DMA is at 15.11 ) but coming from the
almost the lowest level of the past year reached on August 5 at
10.88 ( from a low ever reached onJuly 3rd 2014 at 10.28 ).
The Market shift from a Fearless to Panic very quickly.
Take note that seasonalities was for a stronger VIX getting into August. ( Seasonalities - see 2nd chart below ).
At those level, there is Extreme Fear being priced into the Market and into the Market Participants sentiment.
The Fear and Greed Index from CNN Money as of August 24 is at the Extreme Fear Level and also fully reflected by the VIX Index...
But the most interesting factor s is that the VIX broke a Major Resistance Trendline from a Falling Wedge Pattern that started back in December 2014. ( See 1st chart below - bottom of the chart - red trendlines - ellipse)
Also observe that the SP500 index is broke a Major Support Trendline from a Rising Wedge that started on February 25 2015.
( First Chart Below - Bottom Blue Trenlines ).
VIX and SP500: From a Fearless Market to Pricing Panic ? $SPY, $VIX Trading #vix #SP500 #stocks
VIX Index ( Daily Candles - Bottom of the Chart )
7 DMA ( Blue Line )
SP500 Index ( SPX - Daily BAR LINE - Top of the Chart )
VIX Index ( Daily Black Line )
VIX Index ( Monthly Candles - Bottom of the Chart )
SP500 Index ( SPX - Monthly BAR LINE - Top of the Chart )