VIX Volatility Daily Chart; Bulls and Bears Battle at the 200-Day MA

Yesterday and this morning, the VIX drops below the important 200-day MA at 16.75 currently trading at 15.82 creating bullishness in the stock market. Bears must push the VIX above 16.75 as soon as possible or they are in trouble. Three days ago this happened but the bears began growling again forcing the VIX back above the 200. Will the bears growl sending volatility higher or will they run and hide in the den, under the computer, and allow the bulls to throw a party?

Keybot the Quant is currently short the market and the algorithm is tracking VIX 15.12, a bull-bear line in the sand, with great interest. The quant views the bears as remaining in the game as long as the VIX remains above 15.12. If VIX falls below 15.12, the bulls will be throwing a victory parade as stocks run higher.

Summing up, bears rule the stock market with the VIX above 16.75. The bulls are fighting back and the bears are losing strength between 15.12 and 16.75. The bulls rule the stock market below 15.12. The VIX is now trading at 15.83. The drama continues. Housing Starts drop at 8:30 AM EST (1:30 PM London; 2:30 PM Central Europe; 8:30 PM Beijing; 9:30 PM Tokyo) and are an extremely important and critical data point. Starts are expected at 1.20 million units above last month's 1.14 million. The Starts should move the futures. 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 7:06 AM EST: The VIX is at 15.74 with S&P futures +12. The SPX begins the day at 2851 so if this size pop occurs, the S&P 500 will back test the 50-day MA at 2864. There is a critical bounce or die decision about to occur at 2864-ish. Bears cheer while biting off chunks of bull flesh if the VIX is above 16.75 and the SPX dropping like a rock from 2864. Bulls celebrate by drinking Fed wine and Trump champagne and singing songs of joy if the VIX drops below 15.12 and the SPX is catapulting higher above 2864. If stocks collapse but the VIX does not move above 16.75, the bears got nothing and stocks will recover. If stocks rally, as the futures currently indicate, but the VIX does not drop under 15.12, the bulls got nothing and the market malaise will reassert itself.

Note Added Friday Morning, 5/17/19, at 8:04 AM EST: The stock market rallies strongly on Thursday on the banks and retail stocks but the chips remain weak and volatility did not drop far enough. In addition, retail stocks rolled over in the afternoon and returned to the bear camp. Keybot the Quant is tracking VIX 15.06 as a key bull-bear line in the sand. The VIX is rallying up to 16.66 favoring the bears. The VIX fell to 15.16 yesterday pennies from the key 15.11 level Keybot called out before it occurred; the bulls needed to look under the sofa cushions for another nickel. S&P futures are -19 about 90 minutes in front of the opening bell. The critical VIX 200-day MA is at 16.76 so the bears are knocking on the door of serious negativity. The stock market will turn ugly if the VIX moves above 16.76 and is trending higher. The bulls will remain in the game if they can keep the VIX sub 16.76.

Note Added Friday Morning, 5/17/19, at 8:12 AM EST: The VIX prints 16.80. S&P futures down -23. The morning turns ugly. The bulls will be fighting like H*ll to keep the VIX below 17.76 since they know they lose if they fail.

Note Added Friday Morning, 5/17/19, at 8:16 AM EST: The VIX prints 16.75 a penny below the 200-day. The bulls are trying to save the day. S&P futures down -23.