Tuesday, February 25, 2014

VIX Volatility Daily Chart Battle at 200-Day MA

The drama continues along the 200-day MA at 14.62. This moving average is an important market signal that says bulls win under the 200-day and bears win above. There are about eight oscillations above and below this key level over the last 9 days. Equities want to commit to a direction but cannot make up their mind. The blue sideways triangle is squeezing price in from above and below to force it to make a decision within the next three days, so the story should be written by the end of the week. The bulls are in good shape at 14.23 under the critical 14.62.

The above is a signal anyone can follow to guide your trading over time. Keystone's algo identifies important areas and levels in markets and the algo currently says VIX 13.92 is the line in the sand. So bears are actually favored now with the 14.23 above 13.92. The bulls needed to push VIX under 13.92-14.00 yesterday, and they teased all afternoon, but could not gather the juice to create lower volatility so equities sold off into the close. The 200-day MA is a key signal but the real line in the sand according to Keystone's algo is VIX 13.92. A lid should be placed on the market upside if VIX stays above 13.92. If the bulls push VIX under 13.92 the SPX is on its way well into the 1860's. This chart is important for the remainder of the week. 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.

Note Added at 8:46 AM on 2/26/14:  The bulls jam volatility lower during the last minute of trading. The bulls are running the show with the VIX at 13.67 under the critical 13.93 bull-bear line in the sand which will create upward market lift.

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