/biz/ - Business & Finance

>>54931490
It's just one of many things I look at to try to get a feel for how complacent or fearful the market is but when the 30 day realized volatility on SPX is spikes down suddenly and bigly compared to the 3 month realized volatility that's a sign the market is buying into equities and dropping their hedges. Again, it's just one part of the big picture but it's important and correlates with local bottoms in equities. The easiest way to gauge sentiment is with access to order flow but since as retailers we don't have that we have to use more circumstantial indicators. Vol ratios are an important piece of the overall picture and must be in place for sentiment to be properly gauged but by itself it's useless though so don't make trades based just on this