Did the $VIX signal what the $FED was doing next?

Posted on April 27, 2011 by Eli Radke • 3 Comments

The FED today said they were going keep rates the same and finish out QE2.

Part of trading is noticing when things are out of place. Anthony Crudele has been all over the VIX displacement, he wrote about it on March 17th.  The market and the $VIX were both making lows.  They “should” move in opposite directions especially at their extremes.

When markets act out of whack, eventually one market is “right”.  In this particular case VIX was right as the S&P 500 futures rallied.

This is a post-mortem and are always easiest to see but this is another lesson in seeing how markets interact.

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  • http://pulse.yahoo.com/_3LJIOTIWTNMENERJDAZWTICX6I Vincent

    So are you saying the VIX is due for a runup, this bull run only has so much steam? I hold positions where the vix needs to be above 16 at may expiry to win on bull put spreads.

    • http://blog.mytradingnet.com Eradke

      Not sure what happens with the VIX. The point was that something was out of place. If the ES moves higher and we see the VIX move higher it might be something to look at in terms of the ES.

      • http://pulse.yahoo.com/_3LJIOTIWTNMENERJDAZWTICX6I Vincent

        Thanks!

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