Market Overview

Dan Nathan's VIX Analysis

Related SPY
Heard Of Brandywine Realty? This Analyst Thinks The REIT Is Worth Buying
Best And Worst ETFs Of The Week Amid The Hunt For NASDAQ 5,000
Dow 20,000; Is It Possible? (Seeking Alpha)

Dan Nathan analyzed the recent spike in VIX last week on CNBC's Options Action.

Nathan tried to show what has been happening in the past every time the VIX spiked.

Nathan's chart showed that in the last year, the VIX jumped more than 50 percent from the 52-week low on four occasions. He believes that this is very important because the Fed has been buying a lot of bonds in that period. Nathan said the Fed was buying $85 billion a month -- are now down to $25 billion -- and will be done soon.

He also explained a relation between VIX and the S&P 500. The VIX jumped on every correction in the S&P 500, but a few months later the market gained 10 percent. He believes that this situation is entirely different. Nathan said if traders want to follow the pattern and buy the S&P 500 on the VIX spike, they should wait for the confirmation that the uptrend is still strong.

Nathan thinks that the 1,860 level is an important support point that will tell more about the direction of the market. S&P 500 closed at 1,925 on Friday.

Posted-In: CNBC Dan Nathan VIXCNBC Broad U.S. Equity ETFs Media ETFs


Related Articles (SPY)

Around the Web, We're Loving...

Get Benzinga's Newsletters

Our Experts vs. S&P 500Powered by Benzinga
Marketfy Products Return S&P 500
Morning Profit Maker 42.72% 6.69%
The Option Prophet 91.14% 6.69%
SecretCaps 26.55% 6.69%
Short-Term Trend Trading 11.89% 6.69%
View the highest rated products→