Sunday, March 20, 2016

VIX Volatility Daily Chart

Remember the fight a week or two ago at the 200-day MA? The bulls win and the bears lose. The failure was textbook. Note that price loses the 200 as March begins, then recovers, the move up in the VIX correlates to about a 40-handle down move on the SPX (intraday numbers), and price back kisses that 200-day MA for a bounce or die decision. It dies and bulls win. The VIX collapses. The volatility bears (market bulls) win after price successfully back tests the 200 and fails. The VIX plummets to 14 printing a 13-handle.

The two lows on Thursday and Friday may create a Tweezer Bottom for the VIX. We shall see what Monday holds. A Tweezer Bottom would jive with the CPC and CPCE put/calls, and elevated NYMO, that want to see a pull back in stocks begin at anytime. If stocks sell off, the VIX will run higher.

The sub 14 level now compares back to Halloween. Market bulls are in control of the stock market as long as the VIX stays below 18.67. If the VIX begins moving higher the market bears are growling and if the VIX moves above 18.67, the bears will be slapping the bulls silly. 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.

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