In yesterday’s DecisionPoint Buying and selling Room (airs 3p ET), Carl took a detailed have a look at the VIX through the years. We mentioned final week in our DecisionPoint Alert subscriber weblog that sentiment merely wasn’t THAT bearish but. This chart actually displays what we’re speaking about.
The VIX is usually thought-about a “concern gauge”, telling us how “fearful” market contributors are. The upper the studying, the extra fearful. We might draw your consideration to the readings that occurred over the past 25 years. Discover that readings had been exceedingly excessive on the finish of the Monetary Disaster and COVID-19 bear markets. Readings after 9/11 had been a lot increased than now. There are VIX spikes throughout deep declines in 2010, 2011, 2015 and 2018. These readings are nonetheless MUCH increased than what we’ve now. Readings immediately are insignificant as compared.
Conclusion: We should not count on market pivot factors primarily based on sentiment till readings are “off the charts”.
Technical Evaluation is a windsock, not a crystal ball. –Carl Swenlin
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Erin Swenlin is a co-founder of the DecisionPoint.com web site alongside along with her father, Carl Swenlin. She launched the DecisionPoint each day weblog in 2009 alongside Carl and now serves as a consulting technical analyst and weblog contributor at StockCharts.com. Erin is an lively Member of the CMT Affiliation. She holds a Grasp’s diploma in Data Useful resource Administration from the Air Pressure Institute of Know-how in addition to a Bachelor’s diploma in Arithmetic from the College of Southern California.