Friday, October 26, 2018

VIX Volatility and SPX S&P 500 Daily Charts

Boom. The VIX prints above 27 this morning (green dot). The blood is flowing in the streets. Hand-wringing is rampant. Doom and gloom. Oh woe is me. The negativity increases this morning with S&P futures down -42 a short time ago now down -30. Friday is off to an ugly start with the Q3 GDP data hitting the tape in 45 minutes.

The VIX is above the 200-day MA at 15.68, one of Keystone's short-term market indicators, so the bears are in full control of the stock market. Bulls got nothing unless they can push the VIX below 15.68. On the bear market upper side, which is where we are at now with the VIX at 26.66 as this message is typed, the fear and panic is rampant. Billionaire investor Warren Buffett, after pouring Geritol into his cafe late, will leap off his easy chair and tell you to "buy when there is blood in the streets (small green circles)." What do you think will happen going forward?

In the late January and early February crash, the VIX spiked to 50 which was the perfect signal to go long. One characteristic to look for is if the SPX keeps trading lower but the VIX is not making new highs which may indicate that a bottom is near. 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.

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