VIX Volatility Daily Chart

VIX is at 31.63 above the 200-day MA at 27.43 so the bears are throwing confetti. Bulls got nothing unless they push below 27.43. A big rally may occur today but if VIX remains above 27.43, stocks will roll over and sell off again.

The Keybot the Quant algorithm is currently short and tracking VIX 25.00 as the key bull/bear line in the sand. Thus, gauging the stock market direction is simple. Bears win and stocks will trend lower as long as VIX remains above 27.43.

If the VIX falls below 27.43, the selling stops and stocks stabilize moving choppy sideways. If VIX falls below 25.00, it is off to the races going forward with stocks catapulting higher.

In general over the very short-term and short-term, not only days but days to a week or two or more, that VIX 25.00 is key. Even if stocks rally for several days, if the VIX  does not drop below 25.00, stocks will reverse and selloff and remain weak going forward. 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 9:37 AM EST: Stocks are running higher waving stimulus banners. The SPX jumps 40 points, +1.1%, to 3754. Gold 18.66. Silver 30.15. VIX is at the 31.13 palindrome.

Note Added Tuesday Morning, 2/2/21, at 5:04 AM EST: Wheeee! Whoopie! Wheeee! The bulls pump the banks, retail stocks and tech creating a big rally. Stimulus and vaccine hype carry the day. Keystone has not received the coronavirus vaccine; he wants to check to see if the nurse can give the shot in his butt. Keystone does not want to startle the nurse when he pulls-up to the drive-thru vaccination facility. The same VIX levels will tell you if the rally is real. Use VIX 27.38 for the 200-day MA and Keybot the Quant is currently identifying VIX 25.24. VIX is trading at 27.16 right now so bingo, the bulls cross the first border and are puffing their chests out. Bears need to push VIX back above 27.38, otherwise, a test of the critical 25.24, for all the marbles, will occur.