Almanac: Something New

I've added a new item to the daily Almanac: A calculation of SPY's closing range over the next 30 days, based on the implied volatility -- the VIX.

The item for Monday's Almanac (posted Friday) looks like this:

"Implied volatility suggests a 68% chance that SPY will close, 30 days from now, between $99.22 and $127.08. "

Now, important caveats. Implied volatility isn't really a predictive tool. It represents the collective opinion of traders now about what will happen in time to come. Opinions change. And tomorrow's implied range can surely differ from today's, sometimes by a significant amount.

Still, it's an interesting statistical tool, and since it is the opinion of traders that create ranges, their opinion about what the range is likely to be must carry some weight.