The stock market is volatile. There is no question about the uncertainty that comes with the stock market and if you are picking your own individual stocks, that idea is only magnified. The VIX is something that is indicative of this very notion. Though it has performed well over the latest bull run, it is now facing a period of uncertainty and there is a lot of cash waiting on the sidelines to see how things play out.
- From the author’s indicators, there was no sign of trouble in the stock market but three days later headlines of panic selling appeared.
- The VIX, according to the author, showed 90% of the total volume and indicated a panicky type of selling behavior.
- At +4,000, the McClellan Summation index looked extremely oversold and it was noted by the author that the index has accelerated since September.
“Monday morning I noted that the VIX had not gotten jumpy and downside volume was actually 2 to 1 on the upside which told me there was no panic selling.”
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