VIX - volatility coming back?

The VIX had a strong close today, no question about it. After a strong open, with weakness across the day until 3pm, when the VIX flipped higher, almost closing at a new high.


VIX - weekly cycle

The weekly cycle is something I really like to follow, and here we are...its only Monday, and we're on the verge of going MACD +cycle tomorrow.

Certainly, if market fails to hold above the 1360s..then immediate upside in the VIX is around the 30 level.


VIX - bullish market scenario

Assuming the market can hold the 1365/70 level this week, VIX will probably max out somewhere between 20/23, with then a multi-month decline to form a new low by June/July.

Special note...

If we see VIX 25+ at any point, the door is open to a May'2010 flash lower, with a huge VIX spike. We'll surely know in the next few days.

The bulls had better hold this market up, and away from the 1350s..or there is real trouble brewing - again, I'd reference the NYSE weekly, and the Transports monthly.

Closing Brief

Well, that was a pretty ugly closing hour for those on the long side.

A classic fail at the 10MA on the hourly., ending with bear flags on the indexes, and a bull flag on the VIX.

SP'60min

IWM 60min

VIX 60min

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Summary

The bulls had a chance to get a ramp in the closing hour, with a close over the important hourly 10MA.... they FAILED. It looks like we'll now get a move down to sp'1375/70 early Tuesday. Maybe we'll floor there, but it could just as easily keep going.

More later in the evening.

2pm - pre' close Update

The 60min down cycle is indeed complete, and we're seeing the bounce.

The critical issue is how do we close? Do we fail (again) at the 10MA, and collapse for a further wave Tue/Wed to sp'1375/65 ?

The style in which we close today will be a real clue.

Sp' 60min

Taking into account the daily and weekly cycles..its VERY difficult to call this one.
Daily cycle is low, so I'd be inclined to say we'll be sp'1405/10 by Friday - not least if good earnings
Weekly cycle says 1350 is very possible either later this week, or early next.
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My best guess...'UP', but then..I'm heavily biased. Anyone with 'serious money' should sure as hell be using stops on any new long position. Bears should have bailed at 10am.

Good wishes...more after the close.