Volatility holds onto moderate gains

With the indexes closing at their lows of the day, the VIX similarly closed at its high of the day.


VIX'60min

VIX, daily, rainbow

VIX, weekly

Summary

The daily rainbow chart again put in another green candle. With the upper bollinger at 20, that would be the natural first target for bears tomorrow, if the FOMC disappoint.

VIX remains low..there is an awful long way up just to hit the mid 20s - which is traditionally the zone where only 'moderate market declines' take the VIX.

For the bears looking for a major new wave lower, look to see VIX break 21, if we see 21.25/50 at any time, then it could get interesting. Yet, at the same time, I still think any index decline are not to be trusted until we're back under sp'1325.
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In the bigger picture, I remain looking for VIX 35/40 in August

Closing Brief

The close below the 1380 level should be seen as a tiny victory for the bears, but the hourly charts ALL now have bull flags, and the MACD cycle is fully reset.


IWM

Dow

Sp

Summary

Yes, we closed at the low of the day, but its minor noise, and can't be taken seriously. You can see bull flags (pink) on the hourly cycle charts, we could easily gap out of that at the open tomorrow ,or battle our way to 1395/1400 if the market likes what the fed has to say.

As ever, high risk holding into a Fed day. Urghh

More later

3pm update - Closing hour churn

Well, the 1380 level is holding up pretty well. A close above it looks more likely than not.


sp'60min, rainbow

vix'60min

Summary

Mr Market is merely in a holding pattern until tomorrow, awaiting the results of the FOMC jury. Urghh

* the hourly MACD cycle could easily be flooring at these levels, and as others out there note, a move into the 1390/1400s is viable. Whether that makes for a final wave'5...no idea.

All I am sure of right now, all declines until 1325..not to be taken seriously.

More after the close