Leading Indicators for stock market (SKEW Index, SMLCW Index, Skyscraper Index & VIX)

CBOE SKEW INDEX

It measures hedging activity against major market moves.
A rise in SKEW Index means that more people are hedging against big market move.

A low of 111.47 is what cooled off the market, currently the weekly SKEW index is at 114.66 (17/3/2020)
 

Support Range (Low at 113-111)
Resistance Range (High above 148)


The rising SKEW could mean investors are wary of major macro events, such as negative trade developments.

CBOE SKEW Index, which represents how traders are pricing the possibility of a “black swan” event.

The SKEW Index is based on pricing for S&P 500 options that are well “out of the money” and would only come into play if the market moves significantly.

Both the VIX and the SKEW look at volatility at a 30-day horizon.

 

The current value of CBOE Skew Index can be found by clicking on the below link

Skew Index 

SMLCW (Social Media Large Cap Weekly) Index

The Cboe SMA (Social Market Analytics) Large Cap Weekly Index - otherwise known as the SMLCW Index -is designed to capitalize on short-term market momentum based on Social Market Analytics' social media metrics. It tracks the return of a hypothetical portfolio strategy designed to monetize the information in SMA S-Scores. SMA derives actionable signals that quantify market sentiment regarding stocks from social media data streams. S-Scores express rising or declining sentiment for different stocks.  

• The SMLCW Index portfolio comprises 25 equally weighted stocks drawn from the CBOE Large-Cap Universe (usually around 450 stocks)  with the highest average five-period SMA S-Scores. 

 

• Stocks in this universe are in the top 15 per cent capitalization tranche of stocks that are the underlying for options listed on the CBOE (approximately 3,000 stocks) and have a market capitalization greater than or equal to USD10 billion. The large-cap universe is reconstituted quarterly on the third Friday of the month. 

• This Index aggregates the intentions of professional investors as expressed on Twitter.

 

• The Cboe-SMA SMLCW Index has been harnessing the power of Twitter to predict stock prices for the last 5 years,' says Joe Gits, CEO and Co-Founder of Social Market Analytics. 'We have built a track record of out performance that includes the Tweets of professional investors. Twitter is a leading indicator of performance and this index illustrates that.'  

You can check the current value by clicking on the below link

SMLCW Index Value

 

The boundary values of this Index based on the recent past are

Resistance - 180 - 195.08
Support - 140 - 131

                                  

Skyscraper Index

The Skyscraper Index shows a correlation between the construction of the next world’s tallest building and an impending financial crisis. In fact, the report even suggests that the rate of increase in height could also reflect the extent of that economic crisis.

• This index was launched by Barclays Capital in 2012. This indicator seems to be one of the best economic indicators prior to an economic collapse. Barclays Capital's Skyscraper Index has been published every year.

 

• Firstly, it is certain that these massive buildings are expensive projects, with extremely long duration periods before the commercial ones break even. Thus, they were mostly financed by debt. Such easy and free-flowing credit is only so available when an economy is near its cyclical peak. Right before the peaks, the economy seems to be flourishing. Everyone has the spending power and the desire to borrow to spend, assuming their sources of income will remain stable going concerns.  

 

• This indicator has been almost perfect in predicting Financial Meltdowns since the last 700 years.  

 

• The building has to be more than 200 mts in height.
  

The below timeline (Source - Barclays Capital Presentation) perfectly describes the effectiveness of this Index

 

 

 

 

 

In the recent times, 

China has the Goldin Finance Tower (which has a diamond on the roof) and the 126-floor Wuhan Greenland Center, which are both expected to be completed in 2018–2019. Also, the 1-km, 252-floor Jeddah Tower expected to be completed in 2019–2020.

A recent very informative article on Skyscraper Index 

 

Skyscraper Index 

 

 

VIX (Volatility Index)

The VIX, often called Wall Street’s “fear gauge,” measures implied near-term volatility expectations in the S&P 500 via prices for options on the benchmark.

• The higher it goes, the more fearful traders are and vice versa.

•  VIX measures the expected underlying volatility in the S&P 500 over the next 30-day period on a real-time basis.

• The index is quoted in percentage points

• Anything above INDIAVIX weekly level 23-30 is a matter of concern as far as the Indian markets are concerned.

• Anything above VIX weekly level 30-40 is a matter of concern as far as the US markets are concerned.

You can check the current value by clicking on the below link

VIX