Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

VVIX/VIX Inflection

Published 05/01/2022, 01:59 AM
Updated 07/09/2023, 06:31 AM

What's the point of using fancy indicator ratios such as the VVIX/VIX ratio, when you can simply use the VIX, or the S&P 500 itself?

You know that I'm a fan of using the VVIX/VIX ratio in helping me spot inflection points in indices, particularly the S&P 500 index.

Two days ago, I pointed out that stabilizing bearishness in indices will transition to gradual upside ahead.

VVIX/VIX - Apr-27-2022 Chart

As the WhatsApp snapshot shows, the idea is to observe the higher lows in the VVIX/VIX index. This means the VVF low from this week is higher than the VVE low of mid-March.

This is similar to the lows in March and May of 2021, when VVB and VVD coincided with crucial bottoms in LowB and LowD respectively.

For a detailed overview on how to use the VVIX/VIX, watch this video.

Tying the fundamental rationale to the aforementioned thesis, could be supported by Beijing's latest vow to stimulate the economy ahead of the May Day Holiday, a dovish 50-bp rate hike from the Fed and propagation of forward-looking optimism by Apple (NASDAQ:AAPL) and Meta Platforms (NASDAQ:FB).

Whatsapp-VVIX-Update - Apr-28-2022

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.