VIX Volatility Daily Chart

The Keystone Speculator's VIX 200-Day MA Cross Indicator is a useful short-term market signal. The stock market is rallying higher if the VIX is below the 200 while stocks are selling off if the VIX moves above the 200. The central banker largess is creating lots of oddities and distortions in markets and the VIX remaining above the 200 during the rally off the March low all the way into July is definitely on that list.

If the stock market begins selling off, which is expected, watch the VIX 200-day MA at 27.60. The VIX is currently trading at 23.93, let's call it 24, so bears need about 3-1//2 points higher to create serious stock market turbulence. You can use the 200 to gauge the strength of any selloff. If stocks selloff but the VIX cannot poke up through 27.60, then the bears go buptkis and the bulls will recover. If stocks selloff and the VIX runs up through 27.60, equities will be falling like rocks as bulls begin to panic.

The prior BPSPX chart highlights 74.20 and 70.00 as the two key levels to watch to verify market direction. Thus, you can use these three numbers to gauge the strength of a selloff in stocks. If stocks selloff but the BPSPX remains above 74.20 and the VIX below 27.60, the bulls will recover and rule the stock market again. If stocks selloff and either the BPSPX falls below 74.20, and/or, the VIX pops above 27.60, equities are in trouble. If stocks sell off and both of these parameters fail, the stock market will be falling like a rock. If the BPSPX 70 level fails, it is lights-out and carnage begins on Wall Street. S&P futures -15. VIX 24.02. The bulls are not worried although Ferdinand is wiping beads of sweat from his forehead. 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 5:27 AM EST: S&P -15. VIX 24.07. Euro 1.1826. DXY, or USD, the dollar, is up to 93.04. Copper -2%.