Volatility has begun to increase, and that has important ramifications for the stock market, as well as certain sectors. The feature article examines markets where volatility is trending higher (bearish) and where spike peak buy signals might eventually set up.
One of the strongest underpinnings of this bull market has been low volatility and – to an even greater extent – a very positive construct in the $VIX futures. Quietly, $VIX has been increasing since late August, and now it’s becoming much “noisier.”
$SPX broke below the bottom of the previous trading range. That is, $SPX closed well below the previous support in the 1978-1985 area. If it can close below 1978 again today, that would confirm the downside breakout and would generate a confirmed sell signal for the intermediate-term.
Equity-only put-call ratios have been on sell signals for nearly two weeks. As long as these ratios are trending higher, that is bearish for the broad market.
Beginning on October 6th, there will be a change to the way that $VIX is calculated. In this article, we’ll details the new methodology and make some analytical comments about how this might affect $VIX.
Early this week, $SPX closed at a new relative low, and many of the indicators appeared to be turning bearish (for example, $VIX closed above 14). However, prices have rallied since then, and $SPX made a marginal new all-time high today -- both intraday and closing. Is this probe upwards more effective than the probe downwards was a few days ago? It's hard to say, but a further close at new highs would solidify an upside breakout.
Larry McMillan recently had the honor of ringing the NYSE closing bell with the MoneyShow team after his presentation at the All-Stars of Option Trading seminar on Volatility Trading. See the video and picture of this historic event below.
Our publication schedule is back to normal now, after having altered it slightly in August.
Since the publication date is September 11th, we are including a brief special remembrance, in honor of the victims of the terrorist attacks on that day (both in 2001 and on that day in 2012, in Benghazi).
Recently the historical (also called actual or statistical) volatility of many of the major indices and their derivatives reached extremely low levels. For example, the 10-day historical volatility of $SPX dropped to 3.7%! In this article, we’ll examine how often this has occurred in the past and what it has meant for the broad stock market going forward from that low volatility reading.
The Standard & Poors 500 Index ($SPX) has made repeated new all- time highs -- both intraday and closing -- over the past three weeks. This action has, of course, resulted in a "bullish" $SPX chart.
The bears have made several attempts to sell the market intraday, but each time it seems to quickly regain strength especially late in the day.
Equity-only put-call ratios have remained bullish, AS well.
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