S&P 500 and VIX Index from 1991 - 2009 (Click to Enlarge)
The Volatility Index is a measurement of fear in the marketplace so it is often referred to as the market's "fear gauge". When the VIX is high and rising, investors are scared and traders are bearish. A low and declining VIX indicates strong bullish sentiment and complacency among traders.
The VIX is a good contrary indicator, and it does help warn investors when the market is at extreme levels. But it's not of much use when stocks are range-bound. Normally, VIX Index will be in 10 - 30 range; If VIX is more than 25 mean Market is Fear. On the other hands, If VIX less than 15 mean Market is Confident.
No comments:
Post a Comment
Thank you for your advice, we try to make this blog more informative and useful. Better Everyday.