The Federal Reserve and other global central bankers maintain their jackboots on the throat of volatility to guarantee elevated stock markets in perpetuity. The two key lines in the sand for the VIX are the 200-day MA, now at 14.93, and the Keybot the Quant algorithm's current target value of 13.58. The red circles show when the bears had momentarily glory, however, the VIX is always smacked lower back below the 200 by the central bankers and voila, instant stock market recovery rally. Isn't the crony capitalism game fun?
Bulls are fine and not worried at all about a stock market selloff as long as the VIX does not move above 13.58. Stocks will begin to selloff and fall apart if the VIX moves above 13.58. The stock market will be accelerating lower if the VIX takes out 14.93 heading higher. The VIX begins trading at 3 AM EST so that wil provide an heads-up on the day ahead. S&P futures are down -5 on Wednesday evening, 1/22/20, on the East Coast so watching the VIX in the early morning hours will tell a lot about the stock market direction ahead. 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.
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