VIX Volatility Daily Chart 200-Day MA

Two important levels bear watching on the VIX to determine broad market direction. The 200-day MA at 14.70 is key since extensive equity selling is on tap if the VIX moves above (red circles). The other level is 14.21 currently, calculated by Keybot the Quant, Keystone's trading algo. Above 14.21 and market weakness continues. Below 14.21 and the bulls mount a recovery rally. The May fractal may be in play. Look at how the VIX popped to the 200-day MA, retraced for a day or so, then spiked up through. We are at the point of the initial rejection of the 200-day MA so today will be important to see if the bears can drive the VIX higher, or, if they fold like a cheap suit.

Thus, the two levels, 14.70 and 14.21, can be used as a market gauge. VIX begins the week at 14.37. If VIX falls under 14.21, the bulls send markets higher. If VIX stays between 14.21 and 14.70, equities stumble sideways with a downward bias. If VIX moves above 14.70, the markets will be selling off in force. 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.