Thursday, August 11, 2016
VIX Volatility and SPX S&P 500 Weekly Charts Signal Market Top At Hand
The green circles show attractive market bottoms occurring as the fear and panic spiked higher. There was blood in the streets, several traders were taken out head first and others jumped from windows; fortunately the windows were on the first floor. The panic is a good time to step up to the plate and go long.
The red circles show notable market tops occurring as the VIX was at low levels signaling a lack of fear and rampant complacency. What do you think will happen? Stocks will likely sell off on the weekly basis for several weeks ahead. The long side in stocks would not be attractive until the VIX moves above the 21-22 area.
A key short term market signal is the 200-day MA now at 17.03. If the stock market sells off in the days ahead but the VIX remains under 17, the bears got nothing, stocks will recover. If the VIX moves above 17, stocks will be tumbling lower in earnest. Overall, stocks are long overdue for a pullback. 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.