April 3 Chart of the Day - CBOE Volatility Index
Highly precise price action technical analysis offers the strongest trading edges and the most opportunities across the markets, making it the foundation of our reviews.
The CBOE VIX (ticker symbol /VX) is a real-time market index that represents the market's expectation of 30-day forward-looking volatility. Derived from the price inputs of the S&P 500 index options, it provides a measure of market risk and investors' sentiments. It is also known by other names like "Fear Gauge" or "Fear Index."
Investors, research analysts and portfolio managers look to VIX values as a way to measure market risk, fear and stress before they make trade decisions.
The VIX typically moves in the opposite direction of major stock indices and often serves as a leading indicator of potential market shifts. In essence, it offers traders a valuable tool for timing trade entries—and can also signal optimal moments to exit and lock in profits.
Historically, when the VIX trades below $20, markets tend to be calmer and exhibit a directional bias to the upside.
Between the 2008 financial crisis and the 2020 global pandemic, the VIX steadily trended lower—coinciding with a strong upward trend in the stock market. This rally significantly boosted the value of most 401(k) accounts. The inverse relationship between the VIX and market direction holds true across all time frames, making it particularly valuable for intraday and swing traders, especially given the increasing volatility seen within recent shorter-term market moves.
In response to the new tariffs announced on April 2, this analysis will take a price action technical analysis approach to identify key levels on the VIX chart and evaluate potential next moves.
When combined with powerful mental performance strategies, this method becomes the ultimate blueprint for thriving in any market, on any time frame.
Since May 2023, we've delivered over 475 high-impact Charts of the Day and provide elite-level Price Action Trading education — 100% FREE — to traders inside our highly-rated Trade Room.
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Monthly Chart
On the monthly chart, we can observe that spikes in the VIX often align with major global disruptions—such as the 9/11 terrorist attacks, the 2008 financial crisis, and the COVID-19 pandemic. These sharp volatility surges are commonly referred to as "Black Swan" events.
There's a noticeable recent spike in the VIX...
Weekly Chart
On the weekly chart we can see long periods of little to no volatility with price at or near the $20 level.
During the last year or so the VIX has been making a series of higher highs and higher lows /aka/ an uptrend.
There appears to be potential overhead resistance that could drive the VIX back down—possibly even below the $20 level. However, if that resistance fails to hold, it could signal continued downside pressure for global markets.
It goes without saying though, the only guarantee in the markets is that price cycles. It cycles up and it cycles down across all time frames and all charts and rarely, if ever, moves in a straight line.
Only time will tell for sure what price will do next...
We've layered in traditional low to high Fibonacci levels as well as support/resistance and trend to help identify potential price levels of interest and/or future price targets.
Armed with precision oriented charts like these both traders and investors can formulate their respective plans.
So what's next?
We don't make predictions...
Nobody knows for sure but using these 5 price action tools traders and investors can develop levels of interest in both directions.
- Support/Resistance
- Trend
- Fibonacci
- Supply/Demand Zones
- Change Control Zones
ChartPros provides the exact methodology in its price action technical analysis courses to create charts like this with the most precise and accurate levels from which investors and traders can formulate their respective trade plans.
Take a look at the charts and let us know what you think. We'd like to hear from you in the comments sections.
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