Comparative Analysis Hints at Imminent Major Volatility Increase

Please look at the picture below instead of the interactive chart, if the trend lines are not shown in the upper chart.

This relates to the major indices, including US30 , SPX , and US100 . Here, I am focusing my analysis on Nasdaq100 (US100) given that it's the most volatile with the clearest price changes.

For each of the past 3 major volatility events, the volatility started to increase with the price passing lower to the trend line. Yet, it didn't happen this time. Naturally, falling below a trend support should be a bearish signal, which usually triggers high volatility; however, for last year the market was fast upwards in an unprecedented way due to its reaction to the COVID19 crisis. The bullish run was slowed down by the correction last summer, which didn't trigger high volatility since the compensating trend was still faster than before. This time, it is different.

Nasdaq100 has just started falling below the compensating trend and would probably find support in the pre-COVID19 trend. That is already triggering high volatility which would increase due to the fears of a crash and since many stocks are still over valued.

I don't expect COVID19 levels, but I expect the value here to rise to the 30s in the very near future.

Comment:

Buckle up.