Monday, November 16, 2009
I know it's unusual for the author of a Blog to ask advise from his readers, but the VIX baffles me. I spent the weekend reading about, and plotting charts to see what so many find informative.
Above is a chart where I detected periods where the VIX moved the same way as the /ES. Those small red segments in the lower chart are the only times when the VIX did not move contrary to the /ES. I added a gray dash time line to help align these moments.
The blue line is the /ES plotted as an inverted chart. Pretty much the two charts follow each other. All I see is that an inverted chart of the market price follows the VIX. Currently I recognize that the market price is going up faster than the VIX is going down, but I don't get much out of that either.
I would really like to understand the importance of this index. I do understand how it is useful for option traders to place a value on options, and how that can be an indicator of pessimism. But that logic can be taken both ways.
Analysis presented on this Blog has only informational, and educational purpose, and does not represent a proposal for buying or selling currency contracts.
Posted by Robert Campbell at 11:52