Panic is slowly setting in, VIX highest since late March 2023

Yesterday, the Volatility S&P 500 Index hit its highest value since late March 2023 (when regional banks were imploding), reflecting a quickly deteriorating sentiment among market participants. Both SPX and ES1! constituted a new daily low, which continues to support a bearish case. This case is also supported by RSI and Stochastic reversing on the daily time frame and MACD flattening slightly below the midpoint (failing to break into the bullish area). As for the weekly time frame, all of the mentioned indicators develop bearish structures. In our view, more downside is very likely, with SPX testing its recent lows.

Illustration 1.01

Illustration 1.01 displays the daily chart of SPX and simple support/resistance levels.

Technical analysis gauge
Daily time frame = Bearish
Weekly time frame = Bearish
*The gauge does not necessarily indicate where the market will head. Instead, it reflects the constellation of RSI, MACD, Stochastic, DM+-, ADX, and moving averages.

Please feel free to express your ideas and thoughts in the comment section.

DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.

Comment:

With the SPX rebounding above Support 2, we would like to note it might be proper to take some profits off the table and execute tight management (getting in/out) around this level (in/out of short position, depending on whether the price is above or below the level).