Thursday, October 15, 2015

CBOE Skew and SPX Weekly Charts

The CBOE Skew is elevated again. On the weekly basis, the red circles show tops in the stock market so it appears prudent to tread softly on the long side going forward while bringing on some shorts and buying put protection. The candlestick chart shows price violating the lower standard deviation band so a touch of the middle band, the 20-week MA, at 2036 and dropping, is on the table. The indicators are a mixed bag hinting at sideways action ahead.

The Skew should be respected since its track record is 100% for identifying the tops as the charts indicate. The Skew signals that the stock market will likely print a top this month any time forward. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note: Chart is courtesy of Big Charts annotated by Keystone.

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