VIX Volatility Daily Chart

Volatility is the main driver of market direction currently. The 200-day MA at 14.72 is a very useful market signal with bears happy above and bulls happy below. VIX dropped under to close at 14.52 providing a feather for the bulls caps. Keybot the Quant identifies the sector or area of most importance to market direction in real-time and it is VIX 14.27 currently. Market bulls will run strongly higher to test the all-time highs in quick order if VIX moves under 14.27. Bears are okay as long as they keep the VIX above 14.27.

VIX 14.27 failed yesterday but the bulls could not maintain the lower volatility. Watch 14.72 and 14.27. If VIX remains between, like now, then equities move sideways with a slight downward bias. If VIX moves above 14.72 markets will be selling off in force. If VIX drops under 14.27, equities will run higher to test the all-time highs. 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 11:10 AM: VIX 14.27. SPX 1873. HOD 1874.14 testing the very strong 1874 resistance.

Note Added 7:08 AM on 3/20/14: VIX finishes at 15.12 above the 200-day MA favoring the bears. VIX spiked to 15.95 so pay attention to this value moving forward. The same scenario is in play as described above. The 200-day MA is 14.71. Keybot's number is 14.30. So the bulls are trying to push VIX under 14.71 to create the beginnings of a recovery rally. Bears are trying to push volatility higher, up through the 15.95, which will launch a new round of market selling.