by Dan Norcini
Trader Dan Norcini
The
Volatility Index or VIX, is a useful index for measuring
investor/trader sentiment in regards to the broader stock market’s
health. It reflects option premiums and is therefore a decent way of
peering into the thinking of those who write the things and what they
are expecting/fearing in the immediate future. As with any market index,
it has its shortcomings but all in all, it is remains a good gauge of
sentiment.
While the following chart is not scientific it is helpful in
understanding the impact of the Federal Reserve’s monetary strategies
over the past few years. I prefer to look at this chart as a
demonstration of official monetary sector meddling into the affairs of
capitalism/free markets.
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