When the VIX gets uncorrelated to the SPX it means that a price
reversal is coming within a day or so. that reversal in price might
be as short as 1 day, for example price has been uptrending, and
you get a good 1 day pullback only, or a 1 day bounce if price was
down trending. It could be anywhere from a day to a several days,
and once in a while they occur at major highs and lows. when you
study the chart, it goes back and forth- generally the way I look
at it: if price is uptrending and you get one of these, then expect
at least a 1 day or several days pullback coming any time. If price
is down trending and you get one of these, then expect a price
bounce any day (again could last a day, several days, or larger
inflection)
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Matt, I get confused on this
The VIX getting uncorrelated again to SPX
Posted by chlo8888 on 30th of Nov 2022 at 10:58 am
Matt,
I get confused on this one. Does the VIX getting uncorrelated with the SPX portend a move down or up in this case (for the SPX)?
Thanks.
When the VIX gets uncorrelated
Posted by matt on 30th of Nov 2022 at 11:44 am
When the VIX gets uncorrelated to the SPX it means that a price reversal is coming within a day or so. that reversal in price might be as short as 1 day, for example price has been uptrending, and you get a good 1 day pullback only, or a 1 day bounce if price was down trending. It could be anywhere from a day to a several days, and once in a while they occur at major highs and lows. when you study the chart, it goes back and forth- generally the way I look at it: if price is uptrending and you get one of these, then expect at least a 1 day or several days pullback coming any time. If price is down trending and you get one of these, then expect a price bounce any day (again could last a day, several days, or larger inflection)