Monday, February 10, 2020
VIX Volatility Daily Chart; Bull-Bear Battle at the 200-Day MA; SPX Prints New All-Time High Above 3352
The VIX is battling at the 200-day MA at 15.14 which is a key demarcation line between a short-term bull market versus a short-term bear. The bears are currently winning the game with the VIX at 15.26 which is a dozen pennies above the line in the sand. This is for all the marbles today. Bulls will be emboldened and walk around with their chests puffed out if they can push the VIX below 15.14. Each minute the VIX remains above 15.14, is another nail in the bull coffin.
The thick red line is at 13.76. Keybot the Quant remains long and identifies VIX 13.76 as the key bull-bear line in the sand. Thus, bears win big above VIX 15.14. Bulls battle back but the stock market chops sideways if the VIX is between 13.76 and 15.14. Bulls win big if the VIX drops below 13.76 since stocks will be on their ways to new record highs. 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 11:48 AM EST: The SPX is up 14 points, +0.4%, to 3342. VIX 15.20. The SPX is floating higher today. Remember the 2-hour chart from Friday the MACD was still long and strong. A matching price high is 3346. Bears should simply push the SPX higher 4 more points to tag the matching high which will lock in the neggie d and create the top. The 2-hour chart starts a new candlestick at noon only a few minutes away. She should be topping out right now. This afternoon may be a wild ride lower for stocks. VIX is 15.27 so the bulls cannot push the VIX below 15.14 as yet. The elevated volatility is problematic if you are long the market. Bears dance with glee every minute that the VIX is above 15.14. The SPX may roll over at anytime and collapse under its own weight. Blow on the stock market; that may be enough to knock it over.
Note Added 12:11 PM EST: SPX 3338. VIX 15.33.
Note Added 1:25 PM EST: SPX 3338. VIX 15.42. It's a Mexican standoff. Neither side wants to budge but one of them will flinch. Either the stock market rolls over and dies with the VIX spiking above 16 and higher, or, the bulls are going to drive the VIX below 15.14 to win the game ahead. The next candlestick on the SPX 2-hour chart begins in one-half hour at 2 PM EST. The fifth 65-minute trading segment of the day begins at 1:50 PM EST and the last segment begins at 2:55 PM EST so look for potential pivot points around these times depending on what the robots plan on doing. The PBOC pump overnight supports the stock market.
Note Added 2:13 PM EST: The stock market is a deer in the headlights, frozen at SPX 3337 and VIX 15.45 and too stiff to move either way. The bears could have locked in the top with neggie d if the SPX would have printed 3346 either Friday or today but the bears keep goofing off and playing around. Stocks may simply give up the ghost from here and fall under their own weight since the SPX price was elevated and in the neighborhood of the 3346 with a HOD above 3342. Both sides are sleeping and sluggish on this Monday. The bulls need the VIX below 15.14 to prove they are the real deal but volatility slowly floats higher all day long. The plot thickens. There you go, we are exactly where we were an hour ago. SPX 3338. VIX 15.42. Nowhere, man.
Note Added 2:26 PM EST: Next Monday is the Washington's Birthday/Presidents Day holiday so US markets will be closed. The stock market is typically bullish the two days in front of a three-day holiday weekend so Thursday and Friday may favor the bulls. Therefore, the bears better start the selling fast to do damage on Tuesday and Wednesday, and perhaps straight through the holiday, otherwise, the bulls are going to try and keep the turd floating in the toilet bowl for a couple days because the holiday joy may do some of the lifting as well in the back half of the week. The SPX price still may come up to tag that 3346 price today to lock in the neggie d and officially identify the top, or, the SPX may simply clutch its chest, gasp and keel over. If the bears were smart they would jam it to 3346 for the start of the sixth trading segment at 2:55 PM EST. That would lock in the neggie d and the trading robots would send the stock market into Hades during the last hour. So far, however, today is an easy going, laissez-faire, slow, uneventful day. Bulls yawn while buying stocks.
Note Added 3:31 PM EST: SPX 3347. VIX 15.30. The SPX finally comes up to 3346 and the bears quit goofing around. The bears now have to hold the line at this SPX 3347 and not allow price to move higher. The negative divergence is official on the 2-hour chart, the daily chart and the weekly chart. The pullback may be epic. Enjoy these elevated values since this should be it. The bears have it on a silver platter if they want it; simply push the SPX off the cliff, it is wobbly standing right next to the edge leaning over. Note how the VIX came down to test the critical 200-day at 15.14, and bounced the VIX now at 15.30. The bears are happy, however, they need to turn the SPX over right now in the last half hour. If not, the stock market would likely drop tomorrow; maybe a Black Tuesday? That would be fun. The stock market top is in now. The only thing that can save the day is some kind of uber happy news.
Note Added 3:40 PM EST: SPX 3346. VIX 15.31. It would be wise to make sure you have your shorts on, especially if you walk out in public.
Note Added 3:44 PM EST: SPX 3347. VIX 15.26. Here come the bulls. They are jamming volatility lower to try and create a happy tape. The bulls are gunning for that VIX 15.14 to prove they are in the game still yet. Now we see how many sell orders are coming in late day.
Note Added 3:50 PM EST: Wheee. Whoopie. Spurt. Spurt. The bulls push the SPX to 3348 while jamming the VIX down to 15.24. Fed Chair Powell is personally standing on the VIX's neck with his jack boot. The bulls need a few more pennies lower in the VIX to try and salvage the day. The negative divergence on the charts tells you that something wicked this way comes; a neggie d smackdown.
Note Added 3:54 PM EST: Wheee. Whoopie. Spurt. Spurt. The bulls push the SPX back up to 3348 jamming the VIX down to 15.24. The bulls cannot get the VIX under 15.14 as yet but they are pushing hard, with rich Uncle Fed's help. Here you go. VIX 15.20.... they are jamming into the closing bell..... 15.19 ......
Note Added 3:57 PM EST: This is hilarious. VIX 15.17. VIX 200-day MA 15.14. The bulls are fighting to push that VIX below 15.14; they are not giving up.
Note Added 3:59 PM EST: SPX 3352. VIX 15.14. It will take a little while for the numbers to settle out.
Note Added 6:50 PM EST: The SPX finishes up 24 points, +0.7%, to a new all-time closing high at 3352.09 and new all-time high at 3352.26. The VIX settles at 15.04 the bulls win the day in the last minute, as usual. The VIX battle will continue tomorrow and it begins trading at 3 AM EST. The SPX 2-hour, daily and weekly charts are all in negative divergence marking a top in the stock market right now. If there is any happy news, that may be able to squeeze out a few more hours or so of elevated equities but any negative news will be a catalyst to kick in serious downside. The expectation is for a selloff to begin so Tuesday should be an interesting day. Fed Chairman Powell speaks before Congress this week so traders expect more dovishness which supports the stock market. The central bankers are the market as evidenced by the PBOC and Fed today. The coronavirus death toll is over 1,000. Traders and investors are sanguine about the virus. China is telling its farmers to wear masks when working in the field; that's not good. It means the virus can infect through the air, an airborne disease is Apocalyptic. Oh well, no need to worry especially with everyone so busy buying stocks at the ask.