SPX500 V VIX

Few words thrown together regards to VIX and SPX500

July top by calculations reported 2855 now 3 months later the new top is 2955.71. SPX averages gained 100 points in 3 months.

SPX for 3 months traveled along its top. and without a meaningful correction. Inside SPX current price is pure noise and it deserves desperately a correction. Current prices are mid range to overbought.

Trade strategy as in July is short only until a correction to at least 2600’s trade. Impossible to long a price at its top.

Vital averages 2818.74, 2775.14, 2634.81, 2625.83, 2495.06 and 2405.44.

Trade targets 2955.71, 2904.21, 2869.13, 2813.70, 2742.65, 2681.77, 2646.07

 

VIX

The VIX is a true safe haven asset exactly as  Gold and Silver. SPX is a risk asset while VIX safe haven status trades prices direct opposite to SPX. The ViX correlation currently runs positive 12% and +31% then correlations begin to run higher positives along higher averages. VIX contains an off sync alignment problem to SPX and its related to the SPX top. The higher SPX travels then the more dysfunctional becomes VIX.

Proper VIX status as a correct trade instrument is negative correlations to SPX. A higher VIX means lower SPX while lower VIX translates to higher SPX.

Current averages 17.16, 16.17, 15.65, 15.41, 14.91 and 14.60

Trade Targets 20.31, 19.59, 19.31, 19.59, 18.37, 18.25, 16.57. Trade targets reveal 17.16 holds.

Further VIX explanation to SPX misalignment is VIX best range is 4 points. The lost component to VIX relationship to SPX experienced compression to its averages and therefore lost ranges.

 

Brian Twomey

 

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