The VIX finally closed below 30 on Friday and below the 20-day moving average of 31.20. It is also nearing the critical 27.50 area that served as serious upside resistance for most of September until it finally gave way. Earnings from tech bell weathers Apple (AAPL) and Microsoft (MSFT) next week and the Fed rate decision the following week will likely tell the tale regarding direction of both stocks and the VIX into year-end.
I had written an article in late August on how option prices can help predict future stock prices. I specifically used the VXN -or VIX of the NASDAQ stocks- to show how the big pullback in VXN equated to a short-term top in NASDAQ stocks (QQQ), as shown below.
