Extreme Volatility
Extreme volatility says, once again, that this is the bottom. I know. Volatility was extreme in October and yet, here we are in November making lower lows. And I know that nobody can call a bottom with complete accuracy. But this is not somebody calling a bottom; it’s the collective market of options traders.
Options are extremely expensive right now. Implied volatility is at the second highest level it’s been in five years (the highest time being in the spring, this year).
The chart below shows Nasdaq 100 volatility (statistical in solid red, implied in dashed blue), with a price chart superimposed. Volatility spikes have called market bottoms like clockwork. I rest my case.
