Thursday, August 10, 2017

VIX Volatility Daily Chart; Battle at the 200-Day MA Bull-Bear Line in the Sand

The VIX 200-day MA is a very useful short-term market signal that all professional traders follow. Very simply, the market bulls are partying like its 1999 under the 200-day while the bears growl and bite off chunks of bull flesh above the 200-day.

Since you want to buy stocks when there is blood and carnage in the streets, the high VIX numbers identify these situations. The key stock market bottoms all occur in sync with the VIX spiking to the maximum fear and panic levels (green circles).

The two blue bars show key levels to watch and gauge the progress of the bull-bear battle. The lower bar is at 11.16 and identified by the Keybot the Quant algorithm as the key bull-bear level. The upper bar is the 200-day MA at 11.97.

Thus, if the VIX is above 11.97 (trading at 12.47 as this message is typed about 45 minutes before the Thursday morning opening bell), stocks will be selling off and dropping like a stone. Between VIX 11.16 and 11.97, stocks will move sideways with a negative bias. Under 11.16, and the bulls will be sending the stock market to new all-time highs once again. The bears are winning as the Thursday session begins. The bears got game as long as they maintain the VIX above 11.97, call it 12. 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 11:22 AM EST: VIX pops above 15 and is now at 14.42. The bears are extracting a pound of flesh from the bulls today. Volatility pops so stocks dropThe SPX is down 22 points, -0.9%, to 2452. The 50-day MA support is at 2448. Price is in the neighborhood so it should show respect to the 50 today or in the days ahead.

Note Added 11:11 AM EST on Friday Morning, 8/11/17: VIX pops above 17 and is now at 14.79. The bears are okay as long as VIX remains above that 200-day MA at 12.

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