Tuesday, February 11, 2014

VIX Volatility Daily Chart 200-Day MA Cross

A useful signal tool is the VIX 200-day MA now at 14.58. Bulls are happy if volatility is under 14.58 since markets will run higher. Bears are happy if volatility is above 14.58 since markets will sell off. VIX closes at 14.51 only 7 pennies under this critical level, thus, the bulls are happy. Since VIX closed on top of the line, tomorrow will have to play out for the bulls to prove they want further upside by pushing the VIX lower to confirm the signal change today.

The signal above is useful since it can be easily followed. Keystone's trading algorithm, Keybot the Quant, however, calculates a much more fine tuned VIX market signal and it says 14.15 is the bull-bear line in the sand. The 200-day MA is extremely important to gauge markets but Keybot carries more clout. Interestingly, the bulls pushed vol under 14.15 this afternoon but they could not hold it. By staying under the 14.58 as described above the bulls most definitely have the upper hand but the firm confirmation of continued bullish fun will not occur unless the VIX drops under 14.15. The SPX will move another five to dozen handles higher and the upside is here to stay if VIX loses 14.15. If VIX does not drop under 14.15, then the market selling should resume moving forward. This information is or 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.

Note Added 8:47 AM on 2/13/14: The VIX drops under 14.15, but only for a few minutes. Then VIX moves above the 200-day MA, but only for a few minutes. VIX closes at 14.30 so the table is set the same way again. Stock futures are moving strongly lower to the downside with S&P's -12 so the VIX should regain the 200-day MA.

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