The Volatility Index (VIX) is one of our most reliable sentiment indicators. The VIX is a popular measure of implied volatility of S&P 500 index options. In other words, the VIX tells us what the market believes is in store in the near-term in terms of volatility. It's a gauge of market risk. We know from history that as the VIX rises, it generally spells trouble for stocks. Volatility and fear are somewhat synonymous. When the VIX falls, the bulls are normally in control of the action. Identifying critical patterns in the VIX can provide clues as to the ultimate direction of equities. Currently, the VIX is in an uptrend and has been hanging onto price support near the 23.00 level. So long as that holds, the bulls are likely to be held at bay. However, if the bulls can bring that VIX down below 23.00, then more potential upside in equity prices arises. We are in a triangle formation with the key support at 23.00. For now, our key resistance comes in near the 30.00-31.00. Let's see which level breaks first.
$VIX - Volatility Index
Chicago Board Options Exchange market volatility index VIX, S & P 500 index options implied volatility is the ticker symbol for a popular measure. Financial REALVOL BSE index in the near future other new products based on its current equity derivatives for a section of its broad strategy to strengthen as many parts, intends to launch, it said.
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Bought some Jan 20 calls for 1.75, looking for a rollover soon. Light volume on a short week wrapping up 2010. The Bulls keep marching forward but everything looks topped out to me.
I have been using implied volatility data offered by a company from 2004 to current date. This will help in studying the pattern of volatility index as described here. Bullish market is always desired to keep the volatility under check.