Stock Market Viewpoint

Stock Market Viewpoint
Reading the Tea Leaves...

Wednesday, June 5, 2013

VIX At Threshold

Stock Market Technical Analysis Blog

Click on image to enlarge

Tonight we need to focus on where the VIX stopped today.  In the chart above, I've applied the  Day 432 EMA line.  In the past 6 months we have come up to the line three times, stopped and began a rally by pushing down from the line.  The first one was on the last two days of December  where it actually blipped over a bit but in consideration of the craziness going on in with the Capitol Hill follies it would be safe to say they intended to hold it there and a third day later brought it back down below the line to start a rally.  The second and third time, 2/25 and 4/18, the VIX once again reversed at the 432 and a multi week rally began.  Today's bar closed exactly at the 432, all eyes will be on that line to see if we reverse from it and start another rally or go above it for a couple of days then reverse back down for a headfake or we could blast on across and keep going up for a pronounced market sell off.

I'm not seeing a lot of big block trades favouring any one of these scenarios more than the other.  It looks like traders will be feeling their way through this one, hour by hour and day by day.  

Trade well my friends