$VIX - LESSON -

For those members who are unaware of what the $VIX is, here is a brief explanation with the help of Gemini:

The VIX, officially known as the CBOE Volatility Index, is a real-time market index that represents the market's expectations for volatility over the coming 30 days. It is often referred to as the "fear index" or "fear gauge" because it tends to rise when the stock market falls and investors are fearful.

How the VIX is calculated:

The VIX is derived from the prices of S&P 500 index options with near-term expiration dates. It is a complex calculation that takes into account the implied volatility of these options. Implied volatility is a measure of how much the market expects the price of an asset to fluctuate.

How the VIX is used:

• Measure of market sentiment: Investors use the VIX to measure the level of risk, fear, or stress in the market when making investment decisions. A high VIX indicates a high level of fear and uncertainty, while a low VIX indicates a calmer market.

• Trading: Traders can also trade the VIX using a variety of options and exchange-traded products (ETPs). This allows them to speculate on the future direction of market volatility.

Important points to note:

• The VIX is a forward-looking indicator. It measures the market's expectations for future volatility, not current volatility.

• The VIX is not a perfect predictor of market movements. It is just one tool that investors and traders can use to make informed decisions.

Regarding the chart, we can see that it has been in a downward trend since the middle of 2022 as the market pushed higher and there was positive optimism, with waves of peak pessimism, as we know to be Waves.

The trend has not stayed above the top yellow line which is at $17.30 right now.

Only until the $VIX stays above this level on the retest can we expect the trend to change and likely a reversal with the S&P 500.