Wednesday, June 22, 2016

VIX Volatility Daily Chart Battle at the 200 MA

The VIX 200-day MA is a key short term market signal where bulls are the winner below and bears win above. The 200-day MA is at 18.13 and the VIX launched to 21.17 in today's trade favoring the market bears going forward. However, the Brexit vote is tomorrow and volatility may react violently over the next couple days, so all bets are off until the Brexit result is known. Bears rule above 18.13. Bulls rule under 18.13.

The Keybot the Quant trading algorithm is long currently and tracking VIX 16.40 (purple line). The stock market will move strongly higher if the VIX drops under 16.40. If stocks rally strongly but the VIX does not move under 18.13, stocks will roll back over to the downside. If the rally continues and the VIX keeps moving lower, market bears are okay as long as they do not allow 16.40 to fail. Under 16.40 and the bears are toast. Above 18.13 and bulls are toast. 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 9:57 AM EST on Thursday morning, 6/23/16: Another wild day is on tap. The bears are slapped in the face with a bull rally after the opening bell. The VIX drops to 17.73 well under the 200-day MA at 18.10 so the bulls rule. But if you blinked, you missed the quick spike higher as traders seek downside protection. The VIX jumps to 18.50 back above the 200-day at 18.10 so stocks retreat off the highs. Market bears are fine as long as they keep the VIX above 18.10. Current VIX print is 18.27. The battle continues.

Note Added 11:14 AM EST on Thursday morning, 6/23/16: The VIX drops under 18.10 to 18.04. The bulls slap the bears in the face. Slap, slap. The VIX continues lower under 18 to 17.96 so stocks float higher. The battle at the 200-day MA will likely continue through tomorrow when the Brexit vote outcome is known.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.