The vix is the calling code Chicago Board Options Exchange Market Volatility Index (CBOE)namely, the volatility index of the Chicago put options market. When high volatility appears in the market, as it happens this Monday, the VIX reaches a high figure and correlates with falls in the New York S&P500 index.
In other words, what the CBOE index tells us when it rises is that Fear and pessimism predominate in the market, which reacts with strong downward movements in the face of certain events. On the contrary, when the VIX falls, confidence invades the investor mood.
The theory of this indicator is that if the market is bearish, investors believe that the market is going to fall, they will cover their portfolios by buying more puts and on the contrary if the operators are bullish they will not buy puts, since they will not see the need to protect themselves. Definitely It discounts expectations in the near future and generally works in the opposite direction to the index.
The S&P 500 lost 89.65 pointsor a 2.1%a 4,138.83 unitsMeanwhile he Nasdaq Composite bass 320.07 pointsor a 2.5%a 12,385.14 units. The Dow Jones Industrial Average gave in 632.72 pointsor a 1.9%a 33,074.02 units.
All 11 sector indices of the S&P 500 fell for most of the session, led by technology, consumer discretionary and communication services.
Amazon Inc., Nvidia Corp., Microsoft Corporation Y Tesla Inc. plunged as the benchmark 10-year US Treasury yield topped 3% for the first time since July 21.
The focus is on Fed Chairman Jerome Powell’s speech on Friday, at the conference in jackson hole for more clues about how aggressive the Fed might be with future interest rate hikes.
Source: Ambito
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