CBOE SKEW Index Daily Chart Signals Significant Market Top

Here is an update for the SKEW from a couple weeks ago and lo and behold, price comes back up into the 140's for a double top. A reading down at 100 or so represents normalcy in markets with each higher number increasing the chance for a black swan event to occur in markets. The equity markets have gone whacky since last October. The Fed and other central banker intervention has destroyed price discovery across all asset classes. In other words, no one really knows what anything is truly worth anymore. Over five years of obscene multi-government money printing and stock market goosing programs will do that.

The December peak in SKEW forecasted the selloff to begin this year although note that the peak came about 2 or 3 weeks before the markets really peaked and collapsed. Ditto the peak in March. Equities peaked a couple weeks later as April began. Those prior sell offs resulted in a loss of 115 and 85 SPX points, respectively, so the same result is expected going forward. The chart was highlighted a couple weeks ago so we should already be in the equity downdraft, and may be if yesterday's selling continues, but with the second peak a couple days ago, equities may bump along at elevated levels a week or two more before giving up the ghost. The SKEW says prepare for market selling to begin in the near future, or it may have already begun, with the SPX losing from 80 to 150 points (-4% to -8%). 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.