Has anyone extensively studied the Volatility Index NDX?

Question

Do you use it as a market investment indicator like me? If so, to what extent and what are your success stories or failures? And is there any pattern or hidden order to the chaotic readings.

Answer 1

I guess you mean the VXO? or VIX. Not many follow the VXO as its history is not long i guess.

The VIX is traced by many.

But only extreme readings are helpful. So a VIX  above 30 indicates people are buying puts , so fear is high ( bottom near ), but a VIX in single digits shows very less fear ( complacency) maybe a top.

But it is a better indicator of a bottom than tops.  Its stays in high 30's low 40's for  a short time but can stay in the single digits for a loooong time.

Check out schaeffer.com or cboe.com for more info.

Use the VXO similarly , extreme readings might indicate a change intrend.