Wednesday, March 22, 2017

VIX Volatility Daily Chart; 200 EMA Cross

There are two key levels to watch in the VIX this week. First is the 11.92 level which was violated to the upside yesterday which sent the broad stock market another leg lower in the afternoon trading. Keybot the Quant is on the short side and the algo is identifying 11.92 as the key bull-bear line in the sand. VIX creates a positive influence on the stock market under 11.92 and a negative impact, like now, above 11.92.

The second number to watch is the 200-day MA at 13.56. As the chart shows, the bulls are happy when the VIX is under the 200-day (green circles) while the bears rule above the 200 (red circle). So you can gauge the direction and strength of the stock market with VIX 11.92 and 13.56.

Under 11.92, the bulls rule. Between 11.92 and 13.56 stocks are moving sideways with a slight downward bias. Bears rule the markets above 13.56.

In addition, a previous chart shows the 200 EMA on the SPX 60-minute chart at 2354. This  number is extremely important. Bulls win big above SPX 2354. Bears win big below SPX 2354.

Keybot is tracking the VIX 11.92 number. In addition, bulls will recover if VIX moves below 11.92, RTH moves above 78.25, JJC above 30.40 and/or XLF above 24.04. Volatility, retail stocks, copper and financials are the main parameters dictating market direction currently. Any one of the four parameters turning bullish will stop the downward slide in the stock market. Monitor the parameters above since they tell you what you need to know. 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 6:37 AM EST Friday Morning: With the Friday session ahead, the VIX sits at 13.12. Close, but no cigar for the bears. Bears need to poke above the 200-day MA at 13.56 to prove they have the strength to drive the stock market strongly lower. Market bulls are content with the stock market since they are keeping the VIX below 13.56.

Note Added 8:03 AM EST Tuesday Morning, 3/28/17: The VIX runs above the 200-day MA at 13.56 creating stock market selling for a couple days but then retreats back down through the 200-day MA on Monday, 3/27/17. The VIX tagged 15.11 yesterday but is now down to 12.50. The VIX at 12.50 continues to cause market negativity based on the Keybot algorithm, however, the bears need the VIX above 13.56 if they want to create serious stock market damage. The bulls will easily weather the storm if the VIX remains under 13.56.

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