On the coattails of the price/volume diffusion index breaking the 50 demarcation, the VIX (or more specifically the weighted average standardized VIX) also suggests a heightened risk environment.
More times than not, a weighted standardized VIX (WASV) between -1 and 1 that occurs in conjunction with a price/volume diffusion index below 50 has typically foreshadowed a decline in equity prices (on an absolute or relative basis) for forward time periods between one month and one year. That said, the skew of the standardized skew of the VIX is now under 0.
This could suggest a bounce in equity prices, but given other information a countertrend bounce.
More times than not, a weighted standardized VIX (WASV) between -1 and 1 that occurs in conjunction with a price/volume diffusion index below 50 has typically foreshadowed a decline in equity prices (on an absolute or relative basis) for forward time periods between one month and one year. That said, the skew of the standardized skew of the VIX is now under 0.
This could suggest a bounce in equity prices, but given other information a countertrend bounce.
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