Volatility is "Coiling"

01/14/2008 12:00 am EST

Focus: STRATEGIES

Tim Bourquin

Co-Founder, The Traders Expo and The Futures & Forex Expo

Taking a look at a weekly chart of the Volatility Index (VIX) below, we see that the VIX has been coiling for nearly 11 months. Consolidation like this can be similar to a snake getting ready to strike. A break above descending resistance of the relevant range, could spell another big leg down for the broader indices.

The VIX is an important key in today's market.

Exit is everything.

dfh

Mark Whistler, author of Trading with Passion and Purpose.

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