Monday, September 12, 2016

VIX Volatility and RUT Russell 2000 Daily Charts at Key Pivot Points

As the market bulls stage a small comeback rally after Friday's drubbing, the jury remains out as to whether the rally has staying power. The two parameters above determine today's market fate.

Volatility will provide an up or down signal at the VIX 200-day MA at 16.70. Price came down to test, and slipped under to a LOD at 16.55 but recovered now back above at 17. Market bears win if VIX is above 16.70. Market bulls win if VIX drops under 16.70.

The RUT 50-day MA at 1219 also provides market drama. Price is sticky at this level deciding to bounce or die. As small caps go, so goes the markets.

Thus, if the VIX drops under 16.70 and RUT moves above 1219, the bulls will throw confetti since the selling is over and the rally will gain steam higher. If VIX remains above 16.70 and the RUT starts to stumble lower under 1219 the bears will begin growling strongly again. 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 11:04 AM EST: The VIX is at 16.78 and the RUT is at 1220. The mixed signals create a sideways stumble for stocks. Bulls need 8 more pennies lower in the VIX to claim victory ahead. Bears need to push the RUT back under 1219 or they will fold like a cheap suit. The SPX is at 2136 trying to punch up through the very strong 2135 resistance (reference the SPX S/R article from the weekend). Bulls will recover nicely if they can hold the S&P 500 above the important 2135 S/R so watch this level along with VIX 16.70 and RUT 1219.

Note Added 11:13 AM EST: VIX 17.00. RUT 1220. SPX 2135. The beat goes on.

Note Added 11:49 AM EST: VIX 16.54. RUT 1224. SPX 2140. The bulls tentatively celebrate the pivots in their favor by throwing small amounts of confetti.

Note Added 7:31 AM EST Tuesday Morning, 9/13/16: The bears were slapped in the face yesterday as the VIX failed through the 200-day MA at 16.70 and RUT jumped higher above 1219. The SPX punched up through the strong 2135 resistance and the bears were toast. Key S/R is 2169-2171 (200 EMA on 60-minute 2169; September begins at 2171), 2164-2165 (price resistance 2164; 50-day MA at 2165), 2156-2157, 2152 and 2135. The SPX begins Tuesday at 2159.

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