Wednesday, November 12, 2014

VIX Volatility Daily Chart

The 200-day MA is a key bull-bear signal you can constantly monitor for your trading. When the VIX moves above the 200-day (red circles) the bears are in charge and if the VIX is under the 200-day MA (green circles) the bulls are partying like its 1999. That green circle on the right is where the bulls stabbed the bears in the gut verifying the strong stock market rally. So bears are healing and trying to fight back and stop the wild stock market rally over the last three weeks but do not have much oomph today.

Price is at 13.48 unable to move above the 200-day MA at 14.03 so the bears got nothing. Keybot the Quant algorithm remains long and the algo is currently tracking VIX 14.17 as a bull-bear line in the sand. As far as Keystone's algo goes, the bears need VIX 14.17 before they can stop the equity market upside. So pay attention to the VIX 14.03 and 14.17 key levels. You can use those levels as short entries where you know markets are in trouble above VIX 14.03 so shorts can be brought on or increased, and then scaled into more above VIX 14.17 as markets begin selling off in earnest.

The SPX is finally receiving a spank down from the negative divergence highlighted on the minute and hourly charts the last few days. The Tuesday session was uneventful; volume was low due to the Veteran's Day holiday with the bond market closed. So some market weakness occurs today but as highlighted on the SPX daily chart (scroll back to study that chart), price will want to come back up to the highs for another look because the MACD line is long and strong. So perhaps a day or three of weakness, then back up, then roll over to the downside with markets perhaps placing a multi-year top next week or at anytime as the year finishes. 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 10:10 AM: See how equities recover today since volatility has no oomph to the upside. SPX 2036.40. LOD 2031.95. VIX 13.23. The Keybot the Quant algorithm also identifies JJC 37.01 as a key bull-bear level (copper) and the bulls are having no success pushing JJC higher. JJC is at 36.57 lower on the day, so neither side wants to run with the ball. Stocks stagger sideways. TRIN is down at an uber bullish low 0.67 which obviously helps the bulls stage the recovery after the opening bell. Either VIX 14.17 or JJC 37.01 will flinch and that will tell you the market direction answer forward. Until then, stocks will float sideways or sideways with a slight upward bias.

Note Added 10:33 AM: VIX HOD is 13.76 so that is another level to watch. VIX is at 13.27. If VIX moves above 13.76 the bears are flexing their muscles. If VIX moves above 14.03 a ceiling will be placed in the market upside. If VIX moves above 14.17, equities will be selling off and the SPX will begin trending lower.

Note Added 12:09 PM: VIX drifts lower so bulls receive more fuel. VIX 13.04. SPX 2039. JJC 36.57. TRIN 0.88 off the uber lows but remaining in the bull camp under 1.00. The bulls stage a come back but they got nothing without higher copper. The drama continues; either copper or volatility will flinch that is the key.

Note Added 9:59 AM on Thursday, 11/13/14: The beat goes on. VIX is at 13.07 remaining tame. JJC is 36.52 remaining well under the 37.00 the bulls need for further upside victory. Thus, equities float sideways with an upward bias. Both the VIX is up and the SPX is up so one of them is wrong. Equities will leap higher if VIX drops under 13 and start selling off if the VIX moves higher. Markets are floating higher but the fight between volatility and copper continues. Bulls need JJC above 37 to verify the SPX moving to 2050 and higher. Bears need VIX 14.18 to stop the market rally and initiate steady selling.

Note Added 10:05 AM on Thursday, 11/13/14: SPX 2043. VIX 13.11. JJC 36.48.

Note Added 11:31 AM on Friday, 11/14/14: SPX 2039. VIX 13.64. For the last two days the bears have pushed the VIX above the 200-day MA at 13.98 intraday but cannot maintain the level. The drama continues.

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