Tags: VIX | S&P 500 | bull | indicator

VIX Nearly Breaks a Record

By    |   Tuesday, 16 Dec 2014 07:55 AM

After going up for seven consecutive weeks, the S&P 500 snapped that winning streak in a big way last week. The index dropped 3.52 percent for its worst week of 2014.

With the big drop came big changes to the sentiment indicators and especially to the CBOE Volatility Index (VIX).

The VIX jumped 78.34 percent last week, the second biggest weekly jump since the VIX was started back in 1990. The only time the VIX jumped more was during the week of May 3, 2010.

Back in 2010, the VIX jumped 85.71 percent as the S&P 500 fell 6.39 percent on the week.

During the course of the weeks that followed that huge drop, the S&P 500 bounced 2.23 percent, fell 4.23 percent, rose 0.16 percent and fell 2.25 percent. All told, the index lost 4.14 percent in the four weeks that followed the VIX spike.

The VIX wasn't the only indicator last week that showed an increase in bearishness either. The 21-day moving average on the CBOE Equity Put/Call Ratio jumped from 0.5938 to 0.6162 for the biggest weekly jump since mid-October.

The AAII Sentiment Survey actually moved toward a slightly more bullish stance, as the bullish percentage rose to 45 percent and the bearish percentage fell to 22.3 percent. This put the ratio of bulls to bears at 2.02, up from 1.65 the previous week.

With the bulk of the selling coming on Wednesday and Friday of last week, the AAII survey is likely lagging and will show a major shift toward the bearish camp this week.

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After going up for seven consecutive weeks, the S&P 500 snapped that winning streak in a big way last week. The index dropped 3.52 percent for its worst week of 2014.
VIX, S&P 500, bull, indicator
259
2014-55-16
Tuesday, 16 Dec 2014 07:55 AM
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