Contrarian Stock Market Investing News - Featuring Bargain Stocks » CBOE Vola http://www.contrarianprofits.com Access market-beating ideas from the world's top investment gurus on stock market investing, the gold market, ETFs, Forex trading and real estate values. Mon, 10 May 2010 15:10:45 +0000 http://wordpress.org/?v=2.8.5 en hourly 1 The VIX is Signaling an Imminent Rally http://www.contrarianprofits.com/articles/the-vix-is-signaling-an-imminent-rally/15978 http://www.contrarianprofits.com/articles/the-vix-is-signaling-an-imminent-rally/15978#comments Tue, 28 Apr 2009 03:11:05 +0000 Charles Delvalle http://www.contrarianprofits.com/?p=15978 As long as there’s fear in the marketplace, stocks can’t sustain a rally. Investors simply get too scared of holding onto their positions for long periods of time. They think the market might sharply drop again. But if fear is subsiding, then stocks are able to move higher. Investors begin buying on the dips and there’s a willingness to put more money into the stock market.

That’s why I love the CBOE Volatility Index ($VIX). The VIX is a measure of various S&P 500 index options.

So when the VIX moves up, it means more people are making bearish bets, and usually the stock market drops.

Right now, the VIX is not only moving down, but confirming a downtrend.

As you can see from…

]]> As long as there’s fear in the marketplace, stocks can’t sustain a rally. Investors simply get too scared of holding onto their positions for long periods of time. They think the market might sharply drop again. But if fear is subsiding, then stocks are able to move higher. Investors begin buying on the dips and there’s a willingness to put more money into the stock market.

That’s why I love the CBOE Volatility Index ($VIX). The VIX is a measure of various S&P 500 index options.

So when the VIX moves up, it means more people are making bearish bets, and usually the stock market drops.

Right now, the VIX is not only moving down, but confirming a downtrend.

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As you can see from the chart above, 40 has been a very important support point over the past year for the VIX.

It hit 40 once at the beginning of the year, once before February and once again in the middle of March. Each time, the VIX would move higher and the stock market would push lower.

But three weeks ago that all changed. The VIX managed to break under 40 by a significant margin. Then, over the past two weeks it went back to 40 and tested its new found support.

The VIX failed support and headed back down.

This means that the stock market should have more fuel, as far as investor optimism is concerned, to push higher still.

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