Tuesday, September 24, 2013

VIX Volatility Daily Chart

VIX pops +9% yesterday. Up VIX means down equities and down VIX means up equities. The volatility chart is set up as an attractive tool to gauge market direction for the days ahead. The indicators have an overall sideways vibe for the last couple months or so and this is verified as the moving averages line out sideways. Use the MA's as a bracket identifying a sideways channel with the 20-day MA at 15.09 as the top rail and the 50-day MA at 14.09 as the bottom rail. Market bulls win below 14.09 and bears win above 15.09.

The 200-day MA at 14.48 is a key market metric since bad things happen to equity markets when the VIX moves above the 200-day MA, now only 17 pennies away with price actually piercing the 200-day during Monday's session. Thus, the position of VIX above or below the 200 is the first indication to monitor, then watch to see if the outer range of the moving averages are violated to verify the direction chosen. Currently, the VIX is under the 200, so bulls are happy, but they still need to drop under 14.09 to signal the all-clear for broad market upside. Bears need the VIX to move above the 200-day MA and then above 15.09 to pop the champagne corks as markets sell off.

The thick red line is 14.67 which is Keybot the Quant's level of importance. The algo continuously calculates areas and levels of interest that have the greatest affect on market direction in real-time and VIX 14.67 is at the top of the list today. VIX is under 14.67 so it is causing bullishness in equities currently. Following the above description will verify market direction today. Projection is for VIX to move higher in the days and weeks ahead, and, considering the CR deadline is now only 6 days away, it is reasonable to expect fear to increase and volatility to rise. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.


  1. Keystone, Would you consider the VIX formed a cup and handle pattern over the last two months? If it is a cup/handle, looks like it targets approx. 22.

    1. Nope, you have the right idea and your thinking is okay but you would look for more of a long downtrend that ends in a C&H. VIX is moving sideways in choppy action. You have the right idea, however, and can make a projection with the base at 12, resistance at 17 so target of 22 so that sounds good. A bull flag is possible but you usually want to see the flag part flatter with only a subtle pull back, but the first leg is 12 to 17-18, then pull back, so 13 would send it to 18-19.

      VIX is a special animal that marches to the beat of a different drummer. It does not fit the regular mold for individual plays and indexes. Volatility will have gaps galore so you cannot even put too much effort into filling gaps, the chart is always full of swiss cheese. The most important thing, aside from Keybot's numbers, is the 200-day MA on the VIX. If VIX is below you know that you are in bullish markets and if VIX is above you know you are in bearish markets.

  2. Look for Volatility, XVZ, to take off soon, knocking the S&P 500, SPY, down from its Elliott Wave 5 High.

    Today, Tuesday, September 24, 2013, Small Cap Energy, PSCE, and Energy Production, XOP, rose to new highs as Oil, USO, and Natural Gas, UNG, traded lower. Global Telecom, IST, rose to a new rally high with TI, and NOK, rising to new highs. Home Builders, ITB, US Infrastructure, PKB, Solar, TAN, and Internet Retail, FDN, bounced higher.

    Small Cap Pure Value, RZV, rallied to a new high, manifesting a questioning harami, as Large Cap Value, JKE, continued to trade lower from their rally high.

    Software, IGV, traded lower. Investment Banker, JPM, traded strongly lower. Real Estate, IYR, traded lower.

    Gold Miners, GDX, and Silver Miners, SIL, traded lower on a lower price of Gold, GLD, yet their chart patterns suggest a bottoming out.

    The Vice Stocks, traded by Fidelity Mutual Fund VICEX, traded lower, communicating an end to leveraged speculative investing.

    The Off ETN, OFF, rose as the US Dollar, $USD, traded slightly higher, as Major World Currencies, DBV, and Emerging Market Currencies, CEW, traded lower, led so by the Australian Dollar, FXA. The EUR/JPY closed lower at 133.05.

    Greece, GREK, traded higher as Holly Ellyatt of CNBC reports Temperature rises in Athens amid 48-hour strike.

    Asia Excluding Japan, EPP, traded lower as Indonesia, IDX, IDXJ, Thailand, THD, the Philippines, EPHe, and Malaysia, EWM, traded lower. China Financials, CHIX, led China, YAO, and Far East Financials, FEFN, lower. India, INP, Chile, ECH, Peru, EPU, and Turkey, TUR, traded lower; all of which drove the Emerging Markets, EEM, and the BRICS, EEB, lower.

    A see saw destruction of fiat wealth is underway, as Major World Currencies, DBV, Emerging Market Currencies, CEW, and World Stocks, VT, are trading lower, and Aggregate Credit, AGG, is trading higher, as the Interest Rate on the US Ten Year Note, ^TNX, traded lower to 2.65%, from its recent high of almost 3.0%.

    Asset Managers such as Blackrock, BLK, coined the final swell of Liberalism's wealth with QEternity; since April 2009 the Keynesian and Monetarist money printing policies of the US Federal Reserve, together with carry trade financing have inflated the Sector ETFs from this Finviz Screener ... http://tinyurl.com/m5zadum ...as follows below.

    I have to say that inasmuch as the business cycle is now showing nascent signs of completion, with the weekly jobless report indicating that the economy is failing to provide new jobs, and the PMI is in downturn, and that an investment bubble is apparent ... both short selling opportunities, as well as the opportunity for investing in physical gold are stunningly clearly.

    In as much as fiat money died Friday September 20, 2013, with World Stocks, VT, Major World Currencies, DBV, and Emerging Market Currencies, CEW, trading lower. Jesus Christ operating in dispensation, Ehpesians 1:10, that is in administrative oversight of all things economic and political, is pivoting the world out of liberalism and into authoritarianism, and as such the stock market is turning from bull to bear.

    Internet Retail, FDN, 40%

    Automobiles, CARZ, 56%

    Media, PBS, 39%

    Biotechnology, IBB, 45%

    Small Cap Pure Value, RZV, 33%

    Small Cap Industrial, PSCI, 35%

    IPOs, FPX, 42%

    Stock Brokers, IAI, 46%

    Transportation, XTN, 48%

    Semiconductors, SMH, 26%

    Retail, XRT, 29%

    Pharmaceuticals, PJP, 35%

    Leveraged Buyouts, PSP, 32%

    Solar, TAN, 87%

    Global Consumer Discretionary, RXI, 33%

    Design Build, FLM, 22%

    Paper Producers, WOOD, 24%

    Too Big To Fail Banks, RWW, 35%

    Global Industrial Producers, FXR, 36%

    Resorts and Casinos, BJK, 44%,

    Food and Beverage, PBJ, 28%

    Aerospace, PPA, 40%

    Nasdaq Internet, PNQI, 45%


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