Much Ado About the VIX

Let's talk about the CBOE Volatility Index (VIX) today, as I've received more questions on this indicator in the past few days than I have in a very long time. The main questions center around the pattern and the level of the VIX.

First, while I think the VIX is a great indicator when it gets jumpy, I don't see much use for it when it goes down; we've seen plenty of times when the VIX has declined and stayed there. I also do not think VIX patterns are particularly helpful. Granted, after a period of volatility, we can often say to ourselves that there had been higher lows in the VIX, or a head-and-shoulders pattern. But in January, for instance, I saw many folks fussing over the VIX below 14. Did it matter? It did not....352 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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