MArket was too over confident. But if you keep an ear to CB's managers ie Draghi, Yellen and other, world economy is in a good path, and even if it is not, we will ease the monetary situation and continue to provide liquidity.
But because of the correction the market is facing, VIX may move upside in order to hedge the short position on Indexes.
On on purely...
VXX looks bullish. To reduce slippage, it may be a good idea to wait until the blue resistance lines broken and retested. Price target is $36 if all goes well. We will re-evaluate if pink support lines broken.
Here we are. As forseen for several days, the correction on indexes has been ignited. SPX has started the initiative following by DOWI DAX NASDAQ CAC SMI and tomorrow it will continue with IBEX35.
On the other hand, VIX jump up one to a sudden. The midway to the correction may be around 1840-1820.
Here we are.... At last....In the mean time those who are...
If World economy was good, ECB wouldn't think about putting into the market a European QE, nor would it plan any ABS or LTRO.
ECB wouldn't lower the interest rate that low, even on the negative side in order to push the banks to give loans which bank do not give. They do prefer to earn money from the market through options, warrants, turbo calls etc....
Well, VIx is in a forced uptrend, because of the oversold level on the one hand, and the overconfidence of the market on the other. It means that all indexes are higher then they should be.
Stoch switch from the oversold level to a regular long level. This is the initial sign of a reversal trend in Indexes as well as on VIX. At least a technical correction for...
Despite briefly dipping below 12, based on this chart interpretation the VIX is still poised for a rather large spike this summer. First trigger would be a move over ~14 then a push through major resistance ~19.50 - 20 would probably see a rapid ramp towards the low 30's.
This would roughly correlate to a 20-30% correction in the SPX.
Watch to see if the VIX can...
CIX is always a nice counter mesure tool to confirm the direction of the indexes.
The market was too overconfident and VIX was at its lowest level.
But there are initial signs on a technical level that show clearly the reversal trend i.e VIX may move up, and indexes may move down.
STOCH and MACD give the hint.
We need to see a confirmation if it is just a...
Having carefully watched the INDEX on the market, it is also very wise to compare with the volatility index in order to secure the future of the trend.
As one would see on the chart, VIX is at an oversold level, showing an overconfidence of the market. This level is not sustainable at all, and no short or medium term news can confirm this overconfidence....
Since there's much debate about market direction and VIX I decided to plot ETF for VIX and draw up indicator trendlines. When the indicator crosses these white lines, it sometimes happens before the price line breaks its trend.
SORRY THIS GRAPHIC HAS A PROBLEM I WILL FIX IT SON
Since actual trading levels of S&P are close to the support line and actual VIX Index quotes are far away to the top (Green Circles Level), would be better to expect another S&P bottom in the VIX's mid level (Blue Circles Level)???
I'm trying to understand this VIX/S&P Ratio behavior, so i look forward to get...
The level of VIX is very low. MArkets appear very confident and we can say over confident. However, as I have mentioned few days ago comparing VIX with DOWI, the are initial sign of a reversal trend. It is ofcourse too early, but one should keep in mind that STOCH, MACD as well as the move of the candles suggest that we may well be at the initial pahse of a bull...
Clearly this is unusual to see a market setback like this without any surge in the price of insurance for index options.
This tells us something big is happening:
Possible scenarios:
1. Mutual funds are just rotating cash out of stocks and into bonds and not hedging against their own selling = unusual.
2. Covered call mutual funds are selling massive...
Comparing today's VIX to that in 2005, if same pattern repeats (yes, a BIG if), the current bull market still has 2.5 years to go (to 2017, at 2450), a market trending up with increasing volatility and weakening RSI. Regardless the outcome, if one can simply follow the 10 month moving average, he should be doing alright IMHO.
When we do add DOWI and VIX charts one on the other, we can clearly see the correlation between the two indexes.
When the market is too BULL, VIX is at a very low level. VIX level is too low, and shows an overconfidence of the market. Immediatly a correction, that can be severe in deed is following. Putting a side the technical indicators, we may be able to...
