SPX:VIX Ratio Indicator Daily Chart Megaphone Pattern

SPX:VIX ratio signals that extended selling is in the markets once the 68 level is lost. Now at 78, comfortably above, although this ratio can move dramatically quickly. The chart behaves well technically; red positive divergence bounces price in December, blue negative divergence spanks it down, then red positive divergence bounce again, now a gray negative divergence spank down already in progress off the 90+ top. Thus, the ratio is in the middle of a down move so the days ahead we find out if it wants to fall under 68. If the ratio loses 68, the indexes will experience a very large sell off that day so stay tuned and watch this ratio closely.

Note the large megaphone pattern with too many touches to bother counting; more touches of any trend line indicate a stronger pattern. This megaphone points to a meeting some day of price sub 40 which obviously signals markets that will be far lower than they are today. Studying the red lines closer, see how the RSI, MACD histogram and stochastics all displayed the positive divergence bounce but the money flow had none of it. The money flow wants this ratio to make another lower low again, like it did in March, and this projection would verify the projection by the megaphone pattern to a number under 35.

Keystone uses a break downward thru 68 to signify a major selling day and extended selling ahead for broad markets and, conversely, uses a spike up thru 35 to signify a major buying day and extended buying beginning, but, this rally-mode will not occur until markets sell off large and get this ratio down under 35 as a first step, we are no where near this now. For now, simply wait for a collapse thru 68 which signals that extended selling will be in the markets for a while. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here or any links connected to this information. Consult your financial advisor before making any investment decision.