VIX Volatility and SPX S&P 500 Weekly Charts

Happy Thanksgiving to all! The turkeys are running for their lives. The VIX prints down to 11.42 this week thus far matching the prior volatility lows shown by the red circles which identify stock market tops. Can volatility move lower? Of course it can perhaps back to the record lows in late 2017, however, the Federal Reserve's one-decade long sick Keynesian financial experiment is getting long in the tooth. The Fed has failed to deliver inflation for the last 10 years while at the same time making the wealthy class filthy rich. America is now the land of the have's and have not's; a new Gilded Age is upon us.

The blue line shows how the VIX has only succeeded in coming back down for matching lows as the stock market keeps printing higher highs ever few months. Since volatility and the stock market move inversely to each other over 90% of the time, the VIX should be printing lower lows over the last two years and down to the 2017 levels. The SPX was 2860-ish back then and now at 3154 about 3 hundo points higher.

It is extremely important to see if the VIX wants to drop below that blue trend line and trend lower, if so, the analysts calling for SPX 3500 will look like Einstein's. However, if the VIX spikes higher from here forward, as it did to place the prior tops, the stock market is likely susceptible to a major downside event. The rising wedge pattern on the SPX chart is very ominous and bearish.

The green circles show the panic and fear in markets. During the turmoil of a stock market selloff, folks are wringing their hands regretting they ever bot stocks. The baby is getting thrown out with the bath water. You know all the old cliches. People, unable to deal with the losses in the stock portfolio, jump out of windows, hopefully, they are on the ground floor. When all this blood is flowing in the streets, the VIX spikes to those green circles and you want to buy, buy, buy for the relief rally.

The VIX is a huge beachball that is difficult to keep underwater. The central bankers, the Fed, ECB, BOJ, PBOC and over 20 other global sicko's, all have their filthy hands on the beach ball holding it below the surface. Once in a while, their slimy hands slip and the beach ball pops up and out of the water in an explosive fashion (as the VIX chart above shows) which sends the stock market sharply lower. Once the corrupt central bankers corral the VIX beachball and push it back underwater again, all is calm and fine again with a steadily rising stock market.

The Fed and other central bankers maintain their jackboots on the throat of volatility to reward the wealthy class with higher stock prices. The central bank officials perform the bidding of the wealthy since they are rewarded with lucrative speaking engagements at the large investment banks once they leave public office. Such is the crony capitalism system.

The short VIX positions in the market are at historic record-setting highs. The bears have all left town for the holidays. No one expects the stock market to ever go down again and if it does, the central banks will step in to save the day. For the last two weeks, Keystone has been talking about the rampant market complacency evidenced by the low put/calls, low VIX and other parameters.

What a sick world the Federal Reserve and other central banks have created all for the purpose of lining the wealthy's pockets with easy money stock gains. True human greed on full display for the last decade. The upper middle and wealthy class in America, about 20 million of them, screwed the other 300 million huddled masses. Pay back will be a b*tch and begins when the recession starts. There will be a lot of unhappy Americans that have struggled for 10 years since the Great Recession in 2008-2009, and now give up all hope as another recession begins. Desperate people will do desperate things.

Watch to see if the VIX moves above that 14-ish level where you see the spike high from the prior week. Keybot the Quant identifies VIX 15.04 as the bull-bear line in the sand so bears need to be above 15 if they want to send stocks sharply lower.  The 200-day MA, a key short-term stock market signal, is at 15.14. Thus, bulls are whistlin' Dixie and comfy and cozy in this holiday season enjoying elevated stock markets if the VIX remains below 15.04. They sing and dance each day while sipping Fed eggnog and ECB champagne buying stocks without a care in the world. Blood, carnage, mayhem and misery will visit the holiday table if the VIX moves above 15.14. The bears will be slashing the bulls destroying all holiday joy. 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.