VIX Volatility Daily Chart; Bull-Bear Battle at 200-Day MA Continues

The battle at the VIX 200-day MA at 26.54 continues and the fate of the markets over the short-term hangs in the balance. Do you think the 200-day is important? Look at the touches and near touches this month. Of course it is. The Keystone Speculator's VIX 200-Day MA Cross Indicator dictates short term market direction (although the price action over the last 3 months is atypical). The bulls keep trying to push the VIX beachball under the surface of the water at 26.54 but it keeps slipping out of their hands. Thus, the bulls got buptkis.

This is a nice easy indicator for you to watch that tells you stock market direction going forward. The thick red bar at 38 is the key bull-bear level that the Keybot the Quant algorithm, that is currently long, is tracking.

Thus, if the VIX drops below 26.54, the stock market bulls will be unstoppable. Stocks will catapult higher. Shorts will be running for their lives. Computer buy programs will be hitting in force. New records for the indexes will be on tap. The Nasdaq indexes may go straight vertical into a blow-off top a la the 1999 dotcom bubble behavior. If the VIX remains above 26.54, the stock market will move sideways to sideways lower going forward. If the VIX begins climbing and tags 38, the wheels will fall off the stock market bus and a crash scenario would be on the table.

The VIX is currently trading at 28.70 with the S&P futures down -20. The ECB decision is about four hours away. Global traders are waiting for Madame Lagarde to instruct everyone on how to trade. Her offerings of stimulus, or lack thereof, will move currencies, rates and the stock market. The ECB is expected to stand pat but the central bank criminals always like to provide a little kicker to play the market game so Christine will likely hand out some type of treat from her bag of tricks. The central bankers are the market. 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 5:06 AM EST: S&P -27. VIX 29.12. Lagarde is at the free buffet provided before the press conference wiping a jelly doughnut stain from her scarf.

Note Added 6:37 AM EST: The ECB decision is an hour away. Lagarde is wiping powdered sugar from her fingertips as an aid shoves euros into her saddle bags for delivery to the adoring crowd along with the shiny new pony. S&P -25. VIX 29.08.

Note Added Friday Morning, 7/17/20, at 4:56 AM EST: The bull-bear battle at the VIX 200-day MA at 26.60 continues. S&P futures are +9. The VIX is at 27.28. The bulls need 68 cents lower and they will throw confetti and celebrate victory ahead. Bears need higher volatility.

Note Added Saturday Morning, 7/18/20: The VIX falls to 25.68 below the 200-day MA at 26.63. The bulls are cheering and drinking Fed wine to celebrate. The bears jeer knowing they are on the ropes now. Watch VIX 26.63 closely next week. Bears must immediately push volatility higher here to create a successful back kiss of the support, otherwise, volatility will continue drifting lower below the 200 making mince meat out of the bears.