Wednesday, July 5, 2017

VIX Volatility Daily Chart

There are two important numbers to watch on the VIX that will help you gauge broad stock market direction. First, and most important, is the 11.57 level identified by the Keybot the Quant algorithm. This bull-bear line in the sand determines if the market will collapse, or not. VIX begins the Thursday session at 11.07 in the bull camp.

Second, watch the 200-day MA at 12.46 an important market signal. Market bears win big above 12.46.

Thus, if VIX remains under 11.57, the bears got nothing and stocks will recover and rally. If the VIX moves above 11.57, the stock market will collapse lower. If VIX moves above 12.46, the stock market will be taking out big chunks of point moves to the downside in earnest. The VIX begins trading at 3 AM EST and that will provide a heads-up on what will happen in the regular trading session on Thursday. 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, 7/8/17: The VIX was all over the map to end the week. The VIX popped above the 200-day MA at 12.44 so the bears were throwing confetti and dancing but that was short-lived after the VIX dropped back below. Then, volatility continues lower losing the important 11.58 level identified by the Keybot quant, so you knew stocks would rally strongly and they did. This drama may continue next week. You can continue watching these two key levels, VIX 11.58 and 12.44, to gauge the strength of a market selloff.

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