kleht, about the VIX
I wasn't really trying to "relate" the VIX of today to that of 1987. I agree that circumstances today and then are different. I was only showing that in recent years it hasn't gone much higher than the low 50s, but it can of course, go much higher as we saw in 1987. I included that information in that post to show the most extreme readings we have ever had, but I wasn't trying to say that right now is like 1987.
Your understanding of the VIX not measuring "how low the market drops, but rather how quickly and violently it does so" appears correct, IMO. That's why I said today's VIX seems to show complacency rather than real fear at this time.
But, coincidentally or otherwise, a couple of intermediate term bottoms in recent years were marked by a VIX of 50. I'm guessing that those times we have seen that in the last couple of years has something to do with how some of the big boys have their buy programs set to react to certain VIX readings rather than a true TA phenomenon - kind of a TA situation where you wonder if the dog is wagging the tail, or if the tail is wagging the dog, so to speak. |
