Stock Market Viewpoint

Stock Market Viewpoint
Reading the Tea Leaves...

Friday, August 2, 2013

VIX Hits 12.00

Stock Market Technical Analysis

click on image to enlarge

Things are changing quickly in the market.  Yesterday morning the market opened with about a week's worth of upward travel on the opening tick.  In the afternoon trading today the VIX took a sudden drop down to 12.00.  Looking at the chart above showing the S&P (top left) and Nasdaq (top right) and VIX (below) we can see that the VIX has hit 12.00 five times this year with four of these five producing selloffs leaving an eighty percent chance of a selloff after today.  The one time the 12.00 did not produce a selloff was back in March when everyone in the industry was fully aware that they were trying to run the market to achieve a best quarter in history, not allowing any selling to happen at all costs.  With this afternoon's 12.00 reading we have hit the key VIX number once again.

Granted the manipulation the last few weeks has been like nothing we have seen before which could lead you to believe we have simply topped and will just go pretty much sideways here for a couple of months.  Nonetheless, the statistics are what they are and eighty percent of the time we have hit 12.00 on the VIX this year, we have sold off for one to four weeks afterward.

Trade well my friends


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