With the indexes having a nice reversal from the opening gains, the VIX closed a moderately 4% higher to 18.72. In the scheme of things, volatility remains low. Only with a VIX over 20 can anything 'exciting' be expected to happen.
VIX, 60min
VIX, daily, rainbow
VIX, weekly
Summary
We have the first green candle on the rainbow chart, and that is arguably the most bearish aspect of the market action seen today.
First target remains 20, then 21.50//22.00. VIX'22 is viable by late Friday.
The bigger cycles still suggest VIX 30s..even 40s within 3-5 weeks.
A very difficult day for many, not least yours truly. The opening gap broke above the bear flag..and all seemed lost by 10am. Yet..it failed...and the rest of the day saw a very impressive reversal that even took out the first line of 1340.
What is paramount to keep in mind right now, bears need to see a break of the lower channel line (see daily charts) around the 1330/35 level.
The closing hourly index cycles...
IWM
Dow
SP'500
Summary
Bear victory..but need further declines <1330 to clarify things..along with VIX'20
More across the evening, on what has been an important day.
A short message to those bull maniacs chasing the open higher, and especially for those day-traders not using good stops...
sp'daily5
Bears need a break under the lower channel line of 1330. I suppose a move to 1334 tomorrow might just about qualify as a break, but frankly, I really want to see <1330s to have any confidence of the door opening for much lower levels across the next few weeks.
VIX, daily, rainbow
A green candle on the rainbow chart, bears have something here to be pleased about!
Summary
A difficult day for many, even though we're still only talking about a swing of 1.5% or so.
VIX is starting to show a little hint of more interesting things to come, a break into the 20s tomorrow would be the first sign for the bears that 1374 'may' have been the top.
As I kept saying last week though, until we see sp<1305, the bears can not get confident that wave'2 (if that's what it is) is complete.
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More after the close :)
ps. I think Mr Wonka would have been buying some of those VIX calls this morning
