Safe Trading Blog

VIX & SPX trending in opposite direction, as usual (see plot below): indeed, VIX is a “contrarian sentiment” indicator… The recent bounce of the stocks is then visible as a fast drop on the VIX index.

On the plot, we also emphasize the major role played by the SMA200 on the VIX… The long term trend for the VIX is supported by this SMA & trending upward, which is bearish for stocks.

For now, we need to observe how this SMA200 will play: VIX support or not? If it breaks down, it would be a strong bull signal for stocks but the situation is unclear right now…

This entry was posted on Friday, April 4th, 2008 at 7:37 am and is filed under Stock Code Trading, US Markets. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.