From Afraid to Trade:
Sometimes it’s the simplest things that make the most difference/impact.
Take for example the daily VIX – Volatility Index – and its 200 day Simple Moving Average:
While there are other standard indicators on the chart, let me call your attention to the flat red line – the 200 day simple moving average.
The VIX broke sharply through the 200d SMA initially in April 2010 and in a big way early May (think “Flash Crash”) as Volatility Surged and price (stocks) collapsed.
The VIX fell to the 22.50 level again – 200d SMA – but this time the average provided support as the VIX made it back to 37.50....MORE