Thursday, September 11, 2014

VIX Volatility Daily Chart

Volatility provided drama yesterday with the VIX taking out the 200-day MA which will usher in significant equity market downside. The VIX ran above 14 as the bears popped the champagne corks but as the session played out the VIX collapsed to 12.88 so the bears were frantically trying to place the corks back in the bottles as equities recovered.

Two levels are key; 13.56 and 12.35. The 13.56 is the 200-day MA which signals a bull versus bear market (currently bullish under 13.56). The 12.35 is the current level identified by the Keybot the Quant algorithm as a key bull-bear line in the sand affecting stock market direction. In other words, below 12.35 and the bulls are on easy street with the SPX back above 2000 and rising. Between 12.35 and 13.56, the stock market will move sideways but continue a weak overall profile. Above 13.56 and the stock market will collapse. The VIX begins at 12.88 so market bears are fine as long as price stays above 12.35. Bulls win below 12.35. 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 9:39 AM: The bears push the VIX higher after the opening bell spiking to 13.53 but then receiving a spank down from the 200-day MA at 13.56. The bears are trying to punch up through 13.56 to create market carnage but fall flat on the first try. VIX is printing at 13.23.

Note Added 11:10 AM: The bears push VIX above 13.56 to usher in the market weakness and send the SPX down over 9 points, however, the VIX falls back below the 200-day MA so stocks recover once again. The ebb and flow continues. VIX is now printing 13.17.

Note Added 7:52 PM: The bears fold like cheap suit with volatility collapsing again like yesterday intraday. The VIX drops to 12.80 providing bull fuel into the closing bell. Keybot the Quant continues to track VIX 12.35 as the key market directional driver so the market bears are fine with VIX above 12.35 but bulls will rule the stock market if VIX drops under 12.35. Friday's opening bell should prove dramatic.

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