VIX Index Indicator (Fear Index)

VIX Index is one of the popular index that measure the global stock market's expectation of volatility implied by the S&P 500 and it is also known as "Fear Index". Investors should constantly check the VIX Index as it shows the fear of public investors on the global stock markets.

So, How do we know whether the public investors are panic and fear on the global stock markets? Let's backtesting the past few economic crisis results,

In 2008 (The worst economic disaster since Great Depression of 1929)

VIX Index in 2008

The economical crisis was started around the end of 2007 till 2009. The VIX index above showed how panic the public investors are and compared it with the stock market in 2008. The VIX index has almost reached 100% in such a short period.

S&P 500 in 2008

Usually, when the S&P 500 has fall below the important support lines then we would see a high pitch of VIX index. In other words, global investors are selling off their stocks and start to fear about the future. Or else, the movement of VIX index would be at around 20%.

In 2015 (Latest correction of global stock market)

As we mentioned earlier, if the stock markets went too high without any correction then be prepared for it as it will eventually comes. Please do not mistaken the difference between technical correction and economic crisis.

S&P 500 in 2015

Since after the economic crisis in 2008, the S&P 500 went uptrend for around 220% without any proper deep correction. In August of 2015, the S&P 500 index has finally make a correction for more than 15% in just a period of 6 months.

VIX Index in 2015

Before the stock market collapse, VIX index will always went higher than before because of majority of the investors are fear and uncomfortable with the current markets price. Basically, VIX index (Fear Index) will always be unstable when most of the investors are greed and the global stock index price went up until uncontrollable.

To be advised:
1) Always check the VIX index to see how fear is the global investors at this current stock markets.
2) VIX went higher than normal means that the stock markets are going to have a correction or collapse.

Hope everyone could understand the VIX index. Please drop any comments. Thanks.

Global Stock Market is Falling or Correction?

These days everyone is concerned about the future movement of the Global Stock Market. Recently, the global markets were influenced by the US NASX and S&P 500 markets. Many people were arguing whether is it a new crash (after 10 years) or just a correction.

To be honest, all fundamental analysis are pointless at this current global markets condition, investors should focus more on the technical analysis to determine where to take profit or stop loss. The Index PE ratio has actually dropped back to last year level. However, we believe that it is only a technical correction as the S&P 500 were on the uptrend without any correction since early of 2016 for around 60%.

Around 60% uptrends since early of 2016 

Investors should focus more on the US Stock Market (S&P 500) as the global market falling due to them. Most importantly, this is not yet a global economic crisis because there are no economic crashes at this moment (Unsimilar to the past few global crisis). All the annual company financial reports released lately reflects that the economic are still strong and solid.

However, we would still need to prepare for any possibilities. According to the technically analysis, there are a few supports that need to be considered. If the US index fall below the support, we will have to start preparing for the second stock portfolio adjustment.

S&P 500 First Support @ 2540.00

The first support would be at 2540.00 and the second is at around 2467.73. If it is really fall below the second support, we believed that the bear market might just gonna start. Hence, from now onwards, the global stock markets are getting more harder to invest for normal investors.

To be advised,
1) Please sell off without hesitate for those short term stocks that did not perform too well.
2) For medium or long term investors should wait for a better signal.
3) US government still planning to increase the interest rate on the upcoming FOMC meeting. hence, the global stock markets have not really come to the end yet.
4) If it is just a correction of the global stock market, we should start looking for any undervalued stocks to increase your stock management portfolio.

Please feel free to drop any comments. Thanks.