Volatility S&P 500指數

VIX - 2007-2008 pattern?

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Have been analysing all VIX recoveries after big drops and 90% of them were the same - a curve to the downsidefor some time until a rounded bottom appeared and pumped the value sky-high crossing the long-term curve.

This time it is different. We recovered from last big drop (Covid Crash) the same way as always - but we didn't pump as we used to - and this has happened just once before - 2007-2008. The top rounded to the downside and the bottom acted like breaking down (bullish for stocks) creating an illusion of a bull market. The rest happened as you can see - the it bounced down again but creating a higher low, which was an indication of willing to go up and break the rounded top.

This time we have the same exact situation, but we are missing one more leg down. Will we repeat that same behaviour just before the crash? Meaning a last stock/risk-on assets pump before falling ?


Stay safe.

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