Look For The Stock Market "Fear Index" To Now Slam Back Down

The VIX is often called the “fear index,” because it tends to go above 30 when there is panic selling in the market. What it measures is the premium that options traders pay for volatility on S&P 500 options.

They are willing to pay up for volatility when they get scared, and when few have interest in hedging with puts overtime the VIX goes down.

The VIX is not a forecasting indicator, as the VIX tends to spike when real price volatility peaks out.

It jumped up this month as the stock market corrected, with the Nasdaq falling down to its 50-day moving average. It’s more of a dip, though, then a correction, as the S&P 500 and most stocks didn’t really fall that much.

But, regardless, the VIX jumped up last week to 19. You can see how it jumped this past April and last year in October in the above chart.

It looks like it is likely to go back down below 14 now.

Not much happened yesterday, and not much is likely to happen in the markets today either.

Everyone is waiting for tomorrow’s FOMC edict, and if the market rallies on it I’d expect we’ll see the VIX trend down in August and all the way into Labor Day and the next Federal Reserve meeting in September.

No “AI” was used to write this email or edit it.

More and more independent publishing companies, and websites, are blocking their content from “AI” bots seeking to steal it.

They are fighting back against big tech, but need your support to survive.