VVIX/VIX Inflection
2022.05.01 12:16
What’s the point of using fancy indicator ratios such as the VVIX/VIX ratio, when you can simply use the VIX, or the S&P 500 itself?
You know that I’m a fan of using the VVIX/VIX ratio in helping me spot inflection points in indices, particularly the S&P 500 index.
Two days ago, I pointed out that stabilizing bearishness in indices will transition to gradual upside ahead.
VVIX/VIX – Apr-27-2022 Chart
As the WhatsApp snapshot shows, the idea is to observe the higher lows in the VVIX/VIX index. This means the VVF low from this week is higher than the VVE low of mid-March.
This is similar to the lows in March and May of 2021, when VVB and VVD coincided with crucial bottoms in LowB and LowD respectively.
For a detailed overview on how to use the VVIX/VIX, watch this video.
Tying the fundamental rationale to the aforementioned thesis, could be supported by Beijing’s latest vow to stimulate the economy ahead of the May Day Holiday, a dovish 50-bp rate hike from the Fed and propagation of forward-looking optimism by Apple (NASDAQ:AAPL) and Meta Platforms (NASDAQ:FB).
Whatsapp-VVIX-Update – Apr-28-2022
