The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, spiked more than 45 percent on Friday to trade above 28, for its greatest weekly gain on record (going back to 1990) and up more than 100 percent month-to-date for August, on track for its largest monthly rise since 1990.
Often refers as investors fear gauge, VIX tends to move inverse to stocks and is used to determine the severity of futures moves in stocks. General speaking, a reading above over 30 often associates with some sorts of selling panic while a move below 20 indicates complacency. Below is an update look at a trade in VIX.
Chart 1.1 – CBOE Volatility Index. (daily)
Looking at the 4-year daily chart of VIX, we can see that last week’s massive selloff had caused volatility to spike above the summer 2012 high. With Friday’s gain, VIX is now traded above the complacency threshold and into the panic threshold. This is negative from a technical standpoint because it signals a start of a new down wave…Click here to read more.
You see, our trend-following system is very unique as it attempts to pick turns before others see them. Timing is everything and if you’ve applied our system correctly, you should have made a killing in any markets.
This is just an example of many successful trades that our member had enjoyed recently. After all, aren’t you glad you subscribed?
Subscribe to CEM News to receive more in-depth research from Capital Essence.
P.S. Take advantage of the 30 days special trial [new member only]. Join a small group of elite traders and receiving these daily trading ideas by click here to subscribe.