VIX Volatility 3-Minute Chart; Battle at Key Bull-Bear Lines in the Sand

The VIX popped skyward out of the gate this morning at 3 AM EST and you see the big gap up timed with the opening of the regular session. The bears were winning but that did not last long. If you bring up a VIX daily chart, the 200-day MA is 15.03 a key bull-bear market division line. Keybot the Quant remains long, but is champing at the bit to go short, and is tacking the VIX 14.07 level as the key bull-bear line in the sand. Thus, the battle lines are drawn.

If the VIX drops below 14.07, the bulls will cheer, guzzle down more Fed wine, and celebrate stocks heading to more new all-time record highs. If the VIX remains between 14.07 and 15.03, the bears are winning the game and stocks will maintain a consistent downward bias going forward. If the VIX pops back above 15.03, stocks will tumble down the rabbit hole in quick order, and, considering that the VIX has been teasing the 200-day MA already, if it breaks up thru this time it may have legs. The table is set. Easy-peazy. It's not rocket science. 

Whoa, ho. As this message is typed, here comes VIX down to test the lower bound. VIX is at 14.12 only a whisker away from the key 14.07 bull-bear line in the sand called out by Keybot. This is for all the marbles. 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 2:14 PM EST: The tension mounts. The VIX drops to 14.08 testing the key 14.07 bull-bear line. Who will win this contest? Price must bounce, or die, from here. What say you VIX?

Note Added 2:16 PM EST: Here it is. VIX sits directly on top of 14.07. This is the pivot. Who will win? The bulls and bears battle like the North and the South on the fields of Gettysburg many decades ago.

Note Added 2:22 PM EST: VIX 14.05. The bulls have the bears walking backwards. The SPX is up 6 points, +0.2%, to 3241.

Note Added 2:24 PM EST: Ho, whoa, ho. Thwack, whack. The battle continues. VIX is at 14.08 back above the key 14.07 line in the sand. SPX 3240.

Note Added 2:31 PM EST: VIX 14.12. SPX 3240. The bulls did not have enough gusto to remain below the key 14.07 level. The bulls will build their strength and likely take another run at it. The sixth trading segment of the day begins at 2:55 PM so a pivot may occur in markets between 2:50 PM and 3:00 PM as the algorithms adjust. The two key levels shown for VIX on the chart above remain in play all week long.

Note Added 2:47 PM EST: She's coming down for another look. VIX 14.09. No, check that, VIX 14.08. Here we go, the second test of the key 14.07 support occurs. VIX will bounce or die and the stock market moves in the opposite direction of volatility.

Note Added 2:52 PM EST: VIX 14.07. Time to bounce or die. SPX 3240.

Note Added 2:53 PM EST: VIX 14.06. SPX 3240. It's a battle. Neither side wants to give ground but there can only be one winner.

Note Added 2:57 PM EST: Here it is. VIX is at the LOD 14.04 testing the prior low. If this is taken out to the downside, the bulls win big............ 14.05 ......14.04 ...........the algo programs are adjusting right now; will they hit the market with large buy, or sell, instructions?

Note Added 5:24 PM EST: The bulls win. The VIX collapses through 14 down to 13.85. VIX LOD 13.54. Volatility drops so stocks pop. The SPX gains 11 points, +0.4%, to 3246. HOD 3247. The bulls are throwing confetti and singing songs proclaiming that the upside party will continue, however, the utilities are weak. The bears vow to push the VIX back above 14.07 tomorrow.

Note Added Tuesday Morning, 1/7/20, at 8:37 AM EST: Both sides are rested up and back at it. The VIX is currently trading at 14.06. It's coming up for the back kiss from the underside, testing the 14.07 bull-bear resistance. Time to bounce or die again and the stock market will move today in the opposite direction of the VIX....... 14.06..... 14.05 ...... 14..06......