Corrolation between GEX and VIX - Trading Journal 11.21.20

7 days ago
2 Min Read
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Chart above was an awesome fintwit I follow that made a interesting comparison. The black curve represents the 9day VIX and the orange curve is the GEX. Notice when the 9day VIX is sloping down rapidly the GEX upticks are not as high as if 9day VIX sloping down less. In other words the speed of VIX changing can predict the high points of GEX. The current slope in VIX is not as intense as in early March and April thereby showing that GEX can still reach a higher high.

The higher the GEX the more resistance toward prices breaking out and since the 9 day VIX slope is trending down I would believe the next high for GEX will likely be a top in the markets. Since currently GEX is down in the range of +2 billion so prices can still either fall or rise but a clean top would have GEX higher close to +9 billion but still under the most recent high of +9.2 billion.

Look forward to seeing the remainder of Nov and start of Dec play out and come back to this post on a later date to review my prediction. This is only one indicator calling out that I am applying to make my prediction. Not necessarily valid or even accurate. Just on the premises of VIX and GEX trend use is how I am forming this conclusion.

Again as VIX is decaying slower the GEX can have more opportunities to run higher even though it trends with the VIX. The current down trend on VIX is slow so GEX can potentially continue to run up to a lower high. This would equate to increase in gamma which in turn potentially higher prices in markets. Let see if a new top is form before the end of the year.

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