Live sentiment data from CNN Business Fear & Greed Index
Why the VIX Matters
The CBOE Volatility Index (VIX) tracks 30-day implied volatility on S&P 500 options. When fear spikes, VIX soars and SPY typically falls. A calm VIX signals risk-on sentiment and supports higher SPY prices.
Inverse Correlation: VIX up → SPY down (and vice versa) roughly 80% of the time during trending markets.
Volatility Regimes: Understanding VIX levels helps you position appropriately for market conditions.
Mean Reversion: Extreme VIX readings (above 30 or below 12) tend to revert to the mean, presenting contrarian opportunities.
Options Premium: High VIX means expensive options—better for selling premium. Low VIX favors buying directional positions.
VIX Regime Levels
Different VIX levels signal different market environments:
< 14
Complacency
Low fear, potential for surprises
14-20
Normal
Typical market conditions
20-30
Elevated
Risk-off sentiment rising
30-40
High Fear
Significant market stress
> 40
Panic
Extreme fear, potential bottom
VIX-Driven Trading Playbook
Combine our SPY signals with VIX context for higher-probability trades:
VIX Breakdown Strategy: When VIX loses a prior support level (e.g., 20 → 18) and our system flags a long signal, consider increasing position size on SPY calls.
VIX Spike Fade: Intraday VIX jumps > 10% with SPY at daily support → look for reversal longs once VIX momentum stalls.
VIX Contango vs. Backwardation: Check VIX futures term structure; backwardation confirms sustained stress—consider SPY puts or stay flat.
VIX Extremes: VIX > 35 historically signals capitulation—prepare for mean reversion bounce trades in SPY.
Low VIX Complacency: VIX < 12 suggests market is vulnerable to surprise—tighten stops and reduce size before major catalysts.
Essential VIX Tools
Monitor these indicators alongside the VIX:
TradingView VIX/SPY Overlay: Overlay VIX (inverted) on SPY chart to visualize divergences and identify reversal points.
CBOE VIX Futures Term Structure: Monitor contango (normal) vs. backwardation (stress) for market risk tone.
VVIX (Vol of VIX): Volatility of VIX itself. Rising VVIX ahead of VIX suggests a volatility event is brewing.
10-Day VIX SMA: Simple moving average helps identify VIX regime shifts and filter out noise.
VIX Call/Put Ratio: Measures hedging demand—extreme readings signal potential reversals.
Fear & Greed Index Components
The CNN Fear & Greed Index aggregates seven market sentiment indicators:
Stock Price Momentum: S&P 500 vs. 125-day moving average
Stock Price Strength: Number of stocks hitting 52-week highs vs. lows
Stock Price Breadth: Trading volume in advancing vs. declining stocks
Put/Call Options: Put option volume relative to call option volume
Junk Bond Demand: Spread between junk bonds and investment-grade bonds
Market Volatility (VIX): CBOE Volatility Index level
Safe Haven Demand: Difference in returns between stocks and Treasuries