VIX Volatility Daily Chart; Battle at 200-Day MA Continues

The VIX moves above 12 today ushering in stock market weakness. Long time readers know the 200-day MA, now at 11.14, is a critical bull-bear market signal. The VIX is at 11.50 above the 200-day so the bears rule the stock market.

Keybot the Quant algorithm is on the long side and tracking VIX 10.66 as a key bull-bear line in the sand. Thus, market bears win big with stocks tumbling lower if the VIX remains above 11.14. Stocks will stagger sideways with a slight negative bias if the VIX moves through 10.66-11.14. Market bulls will throw a party if the VIX drops below 10.66 because the SPX will be running above 2600.

The Keybot algo is also tracking the banks so watch XLF 26.00. Price begins Tuesday at 26.12. The stock market will fall apart if XLF drops below 26.00 and stays below trending lower.

There is also drama occurring in the Russell 2000 small caps. RUT is parked at its 50-day MA support/resistance at 1475 and will bounce or die from this level taking the broad stock market in the same direction.

Mixing this market stew together, market bears win big if the VIX remains above 11.14 and the XLF drops below 26.00 and the RUT collapses from the 50-day MA at 1475. Market bulls will rejoice if the VIX drops below 11.14, especially if it drops under 10.66, and if XLF remains above 26.00 heading higher and if the Russell 2000 small caps bounce higher from the 1475 level. Someone is going to win and someone is going to lose; someone will rejoice while the other cries. There are winners and losers everyday in the big city. 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.