Keep a Careful Eye on VIX Creep
VIX creep? What's that?
The best way to illustrate VIX creep, is to show you today's chart. (First, don't forget that the VIX is often referred to as the Fear Index, and it is a reflection of the options market 30 days out. Also, remember that it moves opposite to the direction of the stock market.)
Whew! With that said, let's discuss today's chart. I drew down sloping "fan lines" on the VIX portion of the chart. If there is one important observation you could make, it would be that the fan lines have been rising higher and higher as time moves on. That's not unusual, but it does say that the current down move on the VIX is getting old.
If you look at the VIX highs at each fan line touching point, you can see that each VIX peak was lower. Actually that has been a good thing, because lower/highs and lower/lows is a down trend, and a down trend on the VIX is a good thing for the market.
So, why bring all this up today?
Given the rising fan lines, a higher/high on the VIX is NOT what you want to see for a healthy market. If in the coming days, you see the VIX close higher than 23.4, then we will have made the first higher/high and that would be serious trouble for the markets. Therefore, it is time for you to keep a careful eye on what the VIX does next.