VIX Volatility Daily Chart Oversold Falling Wedge Positive Divergence

VIX charts remain positively diverged. Perhaps today the volatility beach ball, held underwater for the last couple weeks after the late February spike higher, will explode up and out of the water.  Interestingly, the chart was already set up for a bullish spike in the VIX (bearish for equities markets), independent to he Cyprus news that has everyone in a tizzy today. Thus, Cyprus may act as a catalyst and provide additional upside VIX fuel.

The red line shows important S/R at 15.  The 15.15 level holds the key. This level is continuously calculated by Keybot the Quant and identifies the bull-bear line in the sand. If the markets sell off strongly and the VIX moves above 15.15, the bears will cause significant market damage here forward and it is likely that Keybot the Quant will flip short. If the markets sell off, but the VIX stays under 15.15, the bears got nothing and markets will recover, and Keybot will likely remain long. To add more drama, the Cyprus vote was cancelled from this morning and is rescheduled for tomorrow evening. Therefore, this VIX drama likely needs to play out through the FOMC on Wednesday. Markets may be on hold for a day or two until the vote in Cyprus occurs.  This also allows time to see how depositors react in Italy and Spain and if bank runs and contagion occurs, or not.

Projection is for VIX to spike higher moving forward and create market selling. The VIX is projected to move above 15 for a more extended period in the days and few weeks ahead. 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.