06-20-2014, 10:32 AM
I use the VIX as a market panic indicator, to help with long term buy and hold bargains. You can look at its long term history and see those times when the markets were in a panic and thus presenting superior buying opportunities. Late 2008 to early 2009, and mid 2011, the VIX went over 40. Any time it is over 40, money is being given away and you can back up the truck.
It is not such a good indicator when it is very low. It can stay very low for a long time.
It is not such a good indicator when it is very low. It can stay very low for a long time.