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$VIX
🕑 Added 2025-05-12 12:30:28 +0000 UTC$VIX has now dropped to the 200 WMA exactly in the PM as the market moves higher.
50 WMA is just slightly below this level too.
🔍 Understanding the VIX
The VIX measures expected volatility in the next 30 days, based on S&P 500 options.
Often called the "fear gauge" — high VIX = fear, low VIX = complacency.
✅ When to Consider Buying (Bullish Signal)
VIX is spiking above 30-40: Indicates panic or extreme fear — often associated with market bottoms or capitulation moments.
Example: In COVID crash (March 2020), VIX hit above 80 — a historical buy zone shortly after.
VIX reversal: Watch for VIX to peak and then start falling — signaling fear is receding and buyers might be stepping back in.
❌ When to Consider Selling (Bearish Signal)
VIX is very low (<12): Complacency or overconfidence — markets may be due for a correction.
Sudden VIX breakout from a low base: Can signal a surge in fear and potential for pullback.
⚠️ Caveats
VIX is not directional: It measures volatility, not whether the market is going up or down.
Should be combined with other indicators: Like support/resistance, volume, or macro data.
Lagging in fast moves: During flash crashes, VIX can spike too late for tactical entries/exits.
Example Playbook (VIX-Based)
VIX Level Market Sentiment Potential Action < 12 Extreme complacency
Watch for corrections 12–20 Normal range Neutral 20–30
Rising anxiety Caution/hedging > 30 Panic/fear Look for buying setups
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sahilpreet Singh
THE TLI COLLEGE OF ADVANCED MARKET STUDIES 💯
