VIX analisys 13 August 2022 - why I’m still bearish on SP500
That is abviously a death cross on VIX daily chart but if you look in the past last year, I doesn’t mean the trend will go much lower. We had similar thing in the beginning of this year but VIX quickly rallied and we are where we are now.
Now, that’s of the way, Here are the reasons we soon see big drop on all indices:
- Most of the indices tend to take same direction. If US indices rally- the others will follow.
- when VIX is going down- the incides rally- this is what is happening now
- the last three years is a rollercoaster and everytime VIX is dropping down and RSI is almost oversold- it moves back up with a strong move. The RSI is 34.6 now. It’s pretty low and if you look into last couple of years, this is where we should be carefull when trading.
I personally believe that current VIX drop is a warning sign that this rally will be a big one but I don’t see divergency yet. It could mean VIX will stay hear for a while, and indices will try to break up. Also August is always a slow month, people being away on holiday.
Again if you look at past years, September is one of the worst months in trading.
There are many ways to do the market analisys, so I’m not saying I’m right.
It’s completely my gut feeling but I don’t see any reasons why markets could reach ATH this year, or even anywhere close:
- the war in Ukraine is still on
- interests rates are going up and FED is not done yet
- energy prices are going up, in three months winter season will start - this will be struggle to pay the bills for households and businesses.
- companies won’t be able to afford bills, loans, and staff to pay
- sure we have good jobs data by it’s summer. How many of these jobs are season jobs, how many of these are second jobs?
- tension between China and US
I could go on…
Trading is risky, this is not a financial advice, always do your own analisys
Now, that’s of the way, Here are the reasons we soon see big drop on all indices:
- Most of the indices tend to take same direction. If US indices rally- the others will follow.
- when VIX is going down- the incides rally- this is what is happening now
- the last three years is a rollercoaster and everytime VIX is dropping down and RSI is almost oversold- it moves back up with a strong move. The RSI is 34.6 now. It’s pretty low and if you look into last couple of years, this is where we should be carefull when trading.
I personally believe that current VIX drop is a warning sign that this rally will be a big one but I don’t see divergency yet. It could mean VIX will stay hear for a while, and indices will try to break up. Also August is always a slow month, people being away on holiday.
Again if you look at past years, September is one of the worst months in trading.
There are many ways to do the market analisys, so I’m not saying I’m right.
It’s completely my gut feeling but I don’t see any reasons why markets could reach ATH this year, or even anywhere close:
- the war in Ukraine is still on
- interests rates are going up and FED is not done yet
- energy prices are going up, in three months winter season will start - this will be struggle to pay the bills for households and businesses.
- companies won’t be able to afford bills, loans, and staff to pay
- sure we have good jobs data by it’s summer. How many of these jobs are season jobs, how many of these are second jobs?
- tension between China and US
I could go on…
Trading is risky, this is not a financial advice, always do your own analisys