Thursday, January 23, 2014

VIX Volatility Daily Chart

Volatility gaps higher today. The red line is the 13.65 level currently identified by Keybot the Quant, Keystone's trading algo, as the key bull-bear line in the sand. The VIX is above 13.65 which creates market selling. Market bulls need to drive the VIX back under 13.65 as soon as possible. Another useful gauge is the 200-day MA and you can always track this one yourself. Serious market trouble begins when the VIX moves above the 200-day MA now at 14.37. If VIX stays under the 200-day, and then trails lower again, the equity markets will recover and start rallying again.

The blue ovals show two fractals from August and September of interest. Back then price gapped up to the 200-day MA. The VIX then pulled back to rest for a day, or three, then launched above the 200-day creating serious market selling. Thus, if the fractals repeat, tomorrow will be a less volatile day than today as everyone simply slides into the weekend but next week the market ugliness may continue in force. The indicators are all ramping higher with long and strong profiles so higher highs in the VIX are desired even after any pull back would occur with the VIX. Watch the 200-day MA since lots more equity downside damage will occur if/when the VIX crosses above the 200-day at 14.37. 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.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.