VIX Volatility Daily Chart; Battle at 200-Day MA

The VIX pierced the 200-day MA at 14.93 last Friday tanking the stock market but it could not remain above so stocks recovered off the lows. The red circles show a soggy, sick, weak and bearish stock market while the green circles show a relaxed, complacent market kicking back and watching stocks float higher. When the VIX runs above 20, 23, 30, maybe 50, that is real palpable fear and panic with all stocks getting thrown overboard in a frenzy of fear and mayhem. Of course, that is when you want to go long at those huge upside spikes in the VIX; exactly when fear, blood, panic and chaos is at a maximum; those are tradeable bottoms.

The bullish market calls continue in the business media arena. INTC catapults a comical +15% last week on earnings. Cowen immediately upgrades Intel. Investors are calling for huge gains in bitcoin and other digital currencies. Coronavirus, schmonavirus. No one cares. Traders figure that viruses are problems that other humans have to deal with and besides, they are too busy buying stocks to worry about a virus. CNBC analyst Mike Santoli refutes the idea that the current market is like the 1999 stock market top (dotcom bubble). Santoli says the markets now are not valued as high and the fears about a big top occurring are overblown. The WSJ publishes an article telling readers to not fight momentum and stocks will print more gains ahead. There isn't any bears remaining on Wall Street and yet no one points out this simple observation.

Keybot the Quant is on the short side currently and is tracking VIX 13.58 as the key metric impacting stock market direction. It begins trading at 3 AM EST and will point the path forward for Monday. In addition, the quant is tracking RTH 119.93 and XLF 30.31 as important parameters dictating market direction. Both are bullish so if their prices fall before those respective levels, Katy bar the door, the wheels will be falling off the stock market wagon.

Summing up all this mumbo-jumbo,
Bulls will ride to victory if the VIX drops below 13.58
Stocks chop sideways with a downward bias if the VIX remains above 13.58 but below 14.93.
Stocks fall apart if either RTH loses 119.93 and/or if XLF loses 30.31. If both fail into the bear camp, stocks will be accelerating downward.
Bears will ride to victory if the VIX pops above 14.93.
The stock market will be bleeding profusely if the VIX moves above 16.3-ish.
Panic selling will occur above VIX 18.
Somewhere above VIX 18 a tradeable bottom will appear, exactly when everyone is yelling bloody murder. 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 Monday Morning, 1/27/20, at 3:58 AM EST: The VIX is trading above 17 at 17.17 with the new trading week underway. S&P futures tank -31. Dow -285. Nazzy -104. Russell -14. Much of Asia was closed. Japan's NIKK and Topix each dump -2%. European stocks sink lower. Global fears grow over the spread of the coronavirus. The stock market will remain sick and trend lower and lower as long as the VIX is above the 200-day MA at 14.93. Bulls will not shine again until the VIX goes sub 14.93.