Volatility Index Keeps Pointing in the Right Direction

It's funny how many different systems (indicators, news events, tarot cards) people use to determine what the stock market's future will hold.

Directional traders usually rely on the past to help predict future movement. When we're heading into the end of September, many traders are ready for the October shivers. Soothsayers stand poised and ready. Some watch money flow and are ready for gains based on the influx of money from institutional traders and money managers. Others look at the Alan Greenspan briefcase indicator, hoping the mere bulk of a bag holds a clue to the future. Still others look to the stars, waiting for Mercury to get out of retrograde.

Some of these methods are easier to translate into market movement than others. Astrology aside, one indicator I do find extremely helpful is the Chicago Board Options Exchange Volatility Index, known as the VIX. ...