New dumb money and smart money indicators

Written by BostonWealth
May 9th, 2009at 5:31 pm

ETN (Exchange Traded Notes) that tracks one month vix futures prices is VXX and VXZ tracks five month vix futures prices. VXX and VXZ can be found by typing the symbols in http://www.bigcharts.com/

When there is a premium of VXZ over VXX it usually means stocks could correct. It is known as another example of what “smart money is doing and it is a predictive indicator and not a contrarian signal.

Now there are also future prices on vix going forward every month that can be found from the link here: http://www.cboe.com/micro/vix/introduction.aspx#links Click on “Vix Futures Prices” under “Vix Futures” heading

N.B. When spread between VXX and VXZ is trading at a discount to the VIX futures spread, it is the “dumb money” hoping for a more stable market, that is itself a bearish contrarian signal

Categories: Markets

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