Thursday, March 6, 2014

VIX Volatility Daily Chart

Volatility is impacting broad market direction more than any other parameter currently. Keystone's algorithm, Keybot the Quant, provides an advantage in that it identifies the key sectors and other areas that are most influencing market direction at any given time, in real-time. Right now, it is volatility. The algo identifies VIX 13.98 as the key bull-bear line in the sand. Bears were walking happily around with their chests puffed out yesterday since the VIX price remained above 13.98. Then, in the final few minutes, the bears were slapped in the teeth, VIX dropped under 13.98 to give the market bulls the nod going forward. Plain and simple, market bears must send VIX above 13.98 after the opening bell or they got nothing. If VIX stays below 13.98, the SPX will explore the 1874-1890 area.

The key signal that anyone can follow on the charts is the 200-day MA now at 14.68. Above and bears rule the markets. Below and bulls rule the markets. The VIX dropped under the 200-day MA two days ago which provides much of the equity upside rocket fuel. Bears must push VIX above 13.98 to stop the market upside. If the VIX moves above 14.68, a firm ceiling will be in place for equities and a new market sell off will begin. Focus on VIX 13.98 today since it will tell you the story. To begin the day, the bulls are in control with VIX at 13.89This 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 9:50 AM: VIX drops to 13.77 so SPX launches above 1880. The BOJ is yelling Banzai! and bludgeoning the yen sending the dollar/yen up above 103 adding equity market fuel. Bears got nothing unless they can move VIX above 13.98.

Note Added 5:55 AM on 3/7/14: The bears fought back yesterday pushing the VIX above 13.98 so equities leaked lower into the closing bell. The dollar/yen leaked down off the highs to 103 also creating the market softness into the close. Dollar/yen is currently printing 102.90. Keep watching VIX 13.98 to determine market direction. Bears win above VIX 13.98 (now above 14). Bulls win if VIX drops under 13.98.

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