The VIX – Volatility S&P500 Index Options is the Volatility Index and shows the expect volatility within the US market for the next 30days.
- High Value (greater than 30) - means the market is volatile.
- Low Vsalue (lower than 20) – means the market is charm.
As the majority of the world markets take their lead from the US Markets this is an important indicator for all traders to be aware of.
In the example above we have the 12 month graph of the VIX to March 2015, The green indicates the days that the VIX close below 20, which indicate a charm market.
To demonstrate the effectiveness and usefulness of the VIX indicator we have graphed the 12 month VIX graph against the Australian All Orders for the same period.
What you can see in the graph below is that the Australian marker dropped as the VIX rose from a low of 15 to a high of 31, in October 2014. Then again from January to March we see the VIX drop from 24 to 14, while the Australian All Orders rose from 5,300 to 5,900.
In summary the VIX indicator is a useful tool when you really need to understand the general volatility of the market as.
In the example above we have the 12 month graph of the VIX to March 2015, The green indicates the days that the VIX close below 20, which indicate a charm market.
To demonstrate the effectiveness and usefulness of the VIX indicator we have graphed the 12 month VIX graph against the Australian All Orders for the same period.
In summary the VIX indicator is a useful tool when you really need to understand the general volatility of the market as.
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