Stock Market Viewpoint

Stock Market Viewpoint
Reading the Tea Leaves...

Monday, June 17, 2013

Intervention Monday - SPY & VIX

Stock Market Technical Analysis Blog

click on image to enlarge

Going into the bell Friday we had mutliple EMA pushdown situations set up to cause a downdraft in the market today but as we all know they just can't let that happen.  They decided to take liberties with the opening of the S&P Futures Sunday night by basically just spinning the dial higher to a pretty number and then starting the Futures trading on it.  The SPY continued the big gap up at 4:01AM with the high elevated opening then followed a big gap open at the regular session and a decent climb until midday.  

In the two charts above, the VIX on the left and SPY on the right, it is easy to see why all this happened.  They were making an attempt to break the SPY up above the two week red horizontal resistance line shown in the right chart above.  While we did get above it in the late morning, the  SPY couldn't hold and we dropped back below it once again.  The pressure is on them time-wise to make it happen before the VIX's red ascension channel forces it above its blue 432 EMA line shown in the left chart.  If they can just get the SPY above the two week resistance line and close above it, this will probably be enough to cause the VIX to drop out of the red ascension channel.  Today was a big effort but it wasn't enough.  Also, Bernanke's speech on Wednesday looks to be timed right as the VIX gets trapped at a point under the blue 432.  If they fail to break the SPY out by then, Bernanke will have to make the speech with the VIX forced into a powerful pivot point where any word he says might move it above the blue 432 or cause the VIX to drop out of its red ascension channel.  Buckle up...

Trade well my friends