Stock Market Technical Analysis Blog
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In the market today we had a big swing downward intraday. Taking a look now to see how we are set up for tomorrow, I have posted trendline charts of the Nasdaq & SPY above along with the VIX 432 line chart.
- Top chart - NASDAQ - if it continues to sell the next couple of days it doesn't actually break its uptrend, it will just simply be re-entering its multi month steep uphill channel. It is still in the safety zone.
- Middle chart - SPY - is in a serious situation because if it continues selling it will fall out of its multi month uphill channel which would hit the market pretty hard. A real concern here.
- Bottom chart - VIX 432 EMA - we looked at this several nights ago and we see that it actually stopped today no farther above the critical 432 line than it did on its headfake a few days ago. This is an extreme pivot point situation. If the VIX turns back down again tomorrow and closes back down below the 432 then it's very possible this was just another headfake of the VIX and the SPY channel will no doubt have been saved. However, if the SPY loses its multi month channel convincingly tomorrow, the VIX chart will rule the day and we will have a serious sell off.
I would like to believe they will feel it necessary to step in and support the SPY to prevent a VIX breakout but I wouldn't bet on it, we will see.
Trade well my friends