Stock Term – VIX
According to Wikipedia:
VIX is the ticker symbol for the Chicago Board Options Exchange Volatility Index, a popular measure of the implied volatility of S&P 500 index options. A high value corresponds to a more volatile market and therefore more costly options, which can be used to defray risk from volatility.
The VIX can be used for a lot of things, but I usually use it as a complementary indicator to volume. A declining VIX often means a consolidation period, and an increasing VIX often means an accumulation or distribution period. You can find the chart for it here, but it’s available on pretty much every stock site.
Consolidation Confirmation
Just checked my blog traffic for the first time in many months and noticed how closely the traffic keeps up with the volatility in the market. Ramps up at the end of the summer, peaks in October and November, and declines through December and January. I don’t need the VIX to tell me how volatile the market is, I should just check my web stats a little more often. Yet another reason to add to my post extolling the virtues of starting a blog…