VIX Spikes Above 35. What That Means For The S&P 500

May 7th, 2010 | Filed under: Financial Markets,

There is no doubt the market is in a state of chaos right now. The big question is whether this is just a correction or an actual changing of the trend. Either way, we won’t really know until it actually happens.

Nonetheless, we can always use a little big of history and comparison to try and forecast what is to come.

I came across any interesting chart over at the StockCharts.com blog, which I recommend if you are not following it already. See 50+ stock market research websites.

The chart takes a look at the Volatility Index (VIX) and how it spiked above 35 the other day. Learn what the VIX index means.

The chart below shows you what has happened to the S&P 500 when VIX hit +35. You’ll notice that most of the time the reading resulted in a change of trend. The blue arrows mark where the VIX was +35, red line is VIX, black line is S&P 500.

Where do you think the market is headed next?

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Read more on Volatility Index (VIX), S&P 500 (SPX), Far East Consortium at Wikinvest