Zeev's Turnips Patch-No Politics (ZEEV)

[ajtj99]

LG, the problem I've been having with the VIX is that it has been getting whipsawed too much the past 6-weeks or so. I've found the VXN has given the true readings on this drop, while the VIX is giving mis-direction often times.

This divergence between the VIX and VXN has helped me identify false rallies at least 3-times in the past 6-weeks.

When the VXN starts dropping on a 45-degree angle over a 2-day period, you can probably believe a major low is in, and only if it drops about 20% or so, IMO.

The VIX has done this too often to be reliable right now.

Oh, did you see that study that said anytime the VIX gets over 42, it often times will go to 55 before reversing? The sample size was probably small, but it is a somewhat compelling thing if you're using the VIX right now.