Quote:
Originally Posted by Tyga11
What do you mean it's backward volatility? I'm not following that. My only point was that when the Vix is >40 it normally doesn't stay there for long and is pretty much always a sign of a huge bounce very soon.
If Trump does nothing this weekend, the market is going to tank again on Monday. The S&P recession levels are around 4400 (16x) earnings. We may not hit 4400 but that's the bottom
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I wasn’t arguing your point and I’m sorry I didn’t make that clear. I was just commenting on the VIX as a predictor of volatility, which I don’t think it is very good at. It measures recent historic price movements (volatility), that is what I meant about it being backward looking. There is no measure, of course, of forward or future volatility, no good predictor that I’m aware of. But by its nature, VIX goes extreme based on one or two trading days, and I think that invalidates its value in those circumstances. That’s what happened this past week; VIX should steadily fall since it is pretty safe to predict we won’t be seeing the same percentage moves (up or down) in coming sessions that we saw Thursday and Friday. Obviously just my $0.02