Friday, July 31, 2020
VIX Volatility Daily Chart; Bull-Bear Battle at the 200-Day MA Continues
The drama with volatility continues. The Federal Reserve is keeping the VIX beach ball underwater to maintain elevated stock prices and protect America's wealthy class. The Keystone Speculator's VIX 200-Day MA Cross Indicator, a key short-term bull versus bear market signal, remains in play.
Yesterday, the bears threatened some stock market downside as the VIX shot up through the 200-day MA at 26.95 verifying stock market trouble ahead. Alas, Chairman Powell changes into his skivvies and leaps into the swimming pool, wrestles with the VIX beach ball, and drags it under the 200 level of the water again to guarantee more bull market fun. Powell's fingers and toes look like wrinkled prunes since he has been holding that VIX beach ball underwater for so long.
The VIX is currently trading at 24.81 at about 4 AM EST US East Coast time. Tech earnings from AAPL, AMZN, FB and GOOGL are creating joy in the futures overnight especially in the Nazzy 100. S&P futures are up +7.
The Keybot the Quant algo is short right now but whipsawing this week due to the erratic price action. The quant identifies VIX 35.43 as a key bull-bear line in the sand. From the algorithm's perspective, a VIX below 35.43 currently makes for happy bulls.
If the VIX remains below the 200-day MA at 26.95, the bulls will keep slapping the bears around each day. If the VIX pops above 26.95, the stock market will be selling off and the bears will be slapping the bulls. If the VIX moves above 35.43, the wheels fall off and the stock market could potentially be crashing. Choose your poison. 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 Saturday, 8/1/20: The bears push the VIX near 27, briefly, then fold like a cheap suit. The VIX collapses to 24.46 pumping stocks higher. The VIX 200-day MA line in the sand is at 27.01. The battle continues Monday.