VIX is showing strikingly similar pattern to the last Flashcrash similar time last year. Notice when the index was around 15 (high comfort level) in April last year(yellow arrow), the index fell below the bollinger bands and then rallied back out. Have a look at now and the same pattern has emerged. Be wary and safe trading
As hobo says its a comfort index when high means panic when low means complacent Historic low is 15 just before the flashcrash, as hobo says nothing is certain but just another indicator to use when investing in the stock market
Was there any geo-political or other reason why the flash crash occured? I notice it spiked twice, according to the chart. Are you suggesting the next month or so is cautious sailing? What other indicators in support of this one (just in point form) are you noticing? Do you think people are tensing for the end of QE2 and/or China troubles?
joshrichy, See link below for other indicators. There is also a good you tube video attached in the blog. http://www.dailyreckoning.com.au/groundhog-year/2011/04/18/ Murray is basically saying that from the ASX 200 chart, it looks like we are in a similar pattern to what we were in around early 2010.
Could this partially be the uncertainty associated with the Fed's FMOC meeting release, and Bernanke's press conference today? (Tomorrow early AMs Aust. Eastern Time) I am reading different accounts - do gold producer stocks rally in a crash (due to exploding gold spot price) or slump like everything else? I've read about Homestead Mines after 1929 but was looking for a more contemporary example say from the 2008/09 or 1987 crash?
small caps would be hit hardest as they have the most speculation money in them, not sure about the miners during the GFC, I'll dig up the XAO for that period
During the financial crisis Gold stocks were hit just like all other stocks, its the company that has the gold - you just have the money you invested. The only sure way to be as safe as possible is to own physical, which I am devising a plan to do within the next month.
MSM (that is, Mainstream Media) cites exporter concerns about the high AUD relative to foreign currencies as the main factor. Also cited is AUD's rise being faster than underlying commodities produced. What do you all think?
With general unrest, I suspect many people are having the same idea and creating overbuying and so you get high volitility when money is moving more rapidly. So many factors. Correction is ripe in May, maybe sooner, not only for AUD but for lots of markets including silver. PMs were moving into a correction just before Japan, then silver exploded higher. Artificial growth in silver and AUD, nothing goes straight up. I dunno what is going to happen but its going to be dramatic and unexpected. Smart money buys and sells contrary to the 'herd' - so since the bulls are euphoric regarding silver the bears would be getting nervous regarding the unnatural up move. I wish I was more like a bear... caution is good.
Yea it's interesting in Marc Fabers's last interview he said he thought world stock markets looked similar to just before 1897 crash and he expected possibly a large pullback around March but possibly sooner.