Thursday, August 25, 2016

VIX Volatility Daily Chart

The low volatility creates bull market joy. The green circles show market bottoms and the red circles are market tops. The 200-day MA is a critical signal and it remains higher at 16.91 giving the bull's the nod. Keystone's algorithm, Keybot the Quant, calls out VIX 14.45 as a key line in the sand. If the VIX moves above 14.45, bad things are going to start happening to the stock market. The bulls are happy and content as long as they keep the VIX below 14.45. VIX is currently trading at 13.83 inching higher. 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 Saturday Morning, 8/27/16: The dust continues to settle after Yellen tries to flap a hawkish wing but everyone knows she is a dove, so Fischer grabs a microphone to double-down on hawkishness which creates a soggy Friday stock market. The VIX spiked above the critical 14.45 level which is very bad for stocks. Late in the Friday session, the VIX drops back below 14.45 and closes at 13.65. The bulls are not worried or concerned as long as VIX stays under 14.45. Now that it poked above, if it pokes above 14.45 again early next week, stocks will begin falling in earnest with the bears slapping the bulls silly. If the VIX stays below 14.45, stocks will recover and the bulls will be smoking expensive cigars with their feet up on the desk.

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