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What Did VIX Know? The Mysterious Link Between Terrorist Attacks & Rising Risk
Correlation is, of course, not correlation; but following our earlier coincidental chart on the extraordinary drop (and recent rise) in VIX today - after the worst terrorist attack in a decade...
We found some additionally 'odd' research by ABCEconomics.com,showing that this is not the first time that VIX has 'predicted' a terrorist attack...
Earlier today we published an analysis by Nik Crepaldi highlighting the fact that the VIX Index rose in the week preceding the Paris Attacks. Hereafter I extended the analysis to cover some of the most notable Al-Qaeda/ISIS-related terrorist acts since 9/11.
But firstly, let us briefly define the VIX Index. VIX is a trademarked ticker symbol for the CBOE Volatility Index, a popular measure of the implied volatility of S&P 500 index options; the VIX is calculated by the Chicago Board Options Exchange (CBOE). Often referred to as the fear index or the fear gauge, the VIX represents one measure of the market’s expectation of stock market volatility over the next 30-day period.
Observed events
- 13 November 2015: Paris Attacks
- 7 January 2015: Charlie Hebdo Shootings, Paris
- 7 July 2005: London Bombings
- 11 March 2004: Madrid Train Bombings
- 11 September 2001: World Trade Centre, New York
Results
As previously noted, VIX is intended to be a forward-looking index, predominantly focussing on US stocks. However, the author of this research observed the following:
- in all the instances the Index increased in the 5 trading days prior to the terrorist event i.e. the VIX closing value on day -5 is always lower than the close on the day of the event;
- with the except of 9/11, the VIX Index closed lower on the day following the attacks;
- on 9/11 the VIX did not trade as the attacks struck the Twin Towers before the Chicago Stock Exchange opened. Additionally, normal trading activity did not resume until 17 September 2001.
Preliminary conclusions
The above mentioned patterns may indeed have happened by chance, i.e. other elements may have determined the VIX Index to increase prior to the terrorist acts (on the broad assumption that the markets, of course, could not possibly anticipate their occurrence)...
Or not...
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derkanomics
Banksters and ISIS, what's the difference?
ISIS guys would never scam each other.
Of course, why not pocket a few trillion in easy dough if you've already plotted out future events?
.... You are either with us, or them, Bitchez.
That VXX chart earlier, was brilliant Tyler.
I might start using that for F/X trading. It really shadows VIX nicely.
Horribe data and the DOW rallies. Multiple, coordianted terrorist attacks, the the VIX crashes.
We all know what's going here... It's implied, but we all know what's going on here.
https://www.youtube.com/watch?v=_ThkQTo8-jI
Slam vol, pump F/X risk, and hammer P/M's.
What these chart show, is what the VIX does after such events take place.
Good charts, wrong analysis.
That's why I complemented Tyer on VXX... VXX is short term VIX risk pricing.
Try overlaying the 1-3-5min VXX with VIX. Don't use candles. It's amazingly telling.
You out of your mind? In reality, VXX's got very little to do with VIX.
Calm down, it's just a way to corner the VIX.
looks a lot like a few people knew the future.
TPTB are really going to start not liking statistical analysis. It's routinely showing rigged elections (included in the US) and profiteering by the elite based on knowledge of things that were supposedly "unknowable."
Of course, we still haven't heard shit about all those puts on airlines that got placed prior to 9/11. So they're probably not too worried about some pesky VIX analysis.
Interesting. I saw that VIX got slammed. It is probably a buy if you are into that sort of thing. I never said jack squat.
That is retarded. What about the 8-10 other "spikes" on the same chart where nothing happened? stupid.
I have a few fiats in the bank but I am not a digital day trader. Never have been. I like physical anything but physical anything has costs too. I would be interested. I have stuff for sale already. I need to know what it is that I am buying. I guess that I am fucking up by asking what it is that I am buying. I like that digits produce dividends. Cars do not at this time of year.
You still have some 30's anger.
I have a headache.
No, I am actually in my 40's Yen. I am getting old and worthless and I know it. In fact I looked it up and found this.
https://www.youtube.com/watch?v=ey4WSb-BVDQ
My brain still kind of works sometimes though.:-)
lol You'll get no sympathy from me.
;-)
The premise of this article is spooky.
Perhaps spooks are involved.
The Fed has said over and over that it targets Volatility. I guess thats a good guess as to who knew.... and it has a nice ring to it.
The "attack" on parliament hill in Canada was not a terror attack!! Stop spreading these false memes. One guy with mental problems and a beard does not a terrorist make.
The gov't was about to roll out a new anti-terror bill that very same day. It was not expected to pass. Soldier gets shot, parliament is closed and goes into lock-down, and the next day the bill passes easily.
The events listed above were contrived, as seems to be the gist of this article. How then can they be considered terror attacks? The government is fully capable of these subterfuges, but calling them terror events presents the false impression that ISIS or some independant terror group was behind them. The engineered events should be refered to as mock terror exercises and the ones that aren't staged should be known as acts of random violence. When one calls everything terror, the only response is fear. These false flag events should make people angry, not afraid. It is very difficult, over the last 40 years to find terror attacks which were not state-sponsored. Therefore, despite technically being terror attacks, they were not carried out by terrorists, at least not in the sense that we understand the term.
Confusing the issues and the events only helps their position, not ours.