VIX Index Archives - the patient investor

October 8, 2013

Dow threatens reversal

The S&P 500 broke support at the May high of 1675 and penetrated the (secondary) rising trendline, signaling a correction to primary support at 1625/1630. Recovery above 1700 is most unlikely at present, but would indicate another advance.

S&P 500

VIX crossed to above 20: no-man’s-land between low and high. Follow-through above 25 would warn of elevated market risk.

VIX Index

Dow Jones Industrial Average is testing primary support at 14750. Bearish divergence on 21-day (and 13-week) Twiggs Money Flow warns of a reversal. Breach of 14750 would strengthen the signal. Follow-through below 14500/14600 would confirm. Recovery above 15000 is unlikely, but would indicate a rally to 15700.

Dow Jones Industrial Average

The September quarter-end often heralds a correction as fund managers re-balance their portfolios and shed under-performing stocks. Congressional gridlock raises the probability even higher.

September 30, 2013

Short-term support for S&P 500 but long-term bearish

The September quarter-end often heralds a correction as fund managers re-balance their portfolios and shed under-performing stocks.

The S&P 500 is testing support at the May high of 1675 on the daily chart. The long tail on Monday’s candle indicates short-term buying support, but bearish divergence on 21-day Twiggs Money Flow warns of medium-term selling pressure. Breach of support and the (secondary) rising trendline would signal a test of primary support at 1625.

S&P 500

Selling pressure is also evident on the weekly chart, where a similar divergence warns of a primary reversal. This is a relatively weak signal, with 13-week Twiggs Money Flow elevated well above zero and primary support some way above the long-term rising trendline. Failure of support at 1625 would signal a reversal, but it would be prudent to wait for confirmation from the long-term trendline or other major indexes.

S&P 500

* Target calculation: 1700 + ( 1700 – 1550 ) = 1850

VIX crossed to above 15, but still indicates relatively low market risk.

VIX Index

Dow Jones Industrial Average broke its (secondary) rising trendline, signaling a test of primary support at 14800. Bearish divergence on 13-week Twiggs Money Flow warns of a reversal and breach of 14800 would confirm. Recovery above 15660 is unlikely, but would indicate a fresh advance.

Dow Jones Industrial Average

August 26, 2013

S&P 500 correction but Nasdaq and TSX advance

The S&P 500 rallied off support at 1640/1650, but the correction is still underway. Respect of resistance at 1675 would confirm. Bearish divergence on 21-day Twiggs Money Flow warns of long-term selling pressure and reversal below zero would indicate continuation. Only a breach of primary support at 1560, however, would signal reversal to a down-trend.

S&P 500 Index

* Target calculation: 1680 + ( 1680 – 1560 ) = 1800

VIX reversal below 15 indicates low market risk, favoring a primary up-trend.

VIX Index

The tech-laden Nasdaq 100 Index holding above its preceding peak at 3050 reflects a healthy up-trend.

Nasdaq 100 Index

The TSX Composite Index respected its rising trendline, suggesting a healthy up-trend. Rising troughs above zero on 21-day Twiggs Money Flow reflect strong buying pressure. Breakout above 12800 would offer a target of 13200*, but expect some resistance at 12900/13000.

* Target calculation: 12800 + ( 12800 – 12400 ) = 13200

August 12, 2013

S&P 500 healthy up-trend

The S&P 500 is again testing resistance at 1700 after a short retracement. Bearish divergence on 21-day Twiggs Money Flow continues to warn of selling pressure, but breakout above 1700 would signal an advance to 1800*. Reversal below 1675 would test support at 1650.

S&P 500 Index

* Target calculation: 1680 + ( 1680 – 1560 ) = 1800

But the primary up-trend shown on the quarterly chart is healthy and, while correction to the rising trendline would be reasonable, trend reversal is unlikely.
S&P 500 Index

The VIX below 15 indicates low market risk.

VIX Index

Canada’s TSX 60 VIX is similarly bullish.

TSX 60 VIX Index

The TSX Composite Index is testing support at 12400. Penetration of the declining trendline would indicate the correction is over and advance to 12900/13000 likely. A 21-day Twiggs Money Flow trough above zero would suggest a healthy up-trend. Breach of support remains as likely, however, and would test 12250. In the long-term, breakout above 12900/13000 would offer a long-term target of 14000*.
TSX Composite Index

* Target calculation: 13000 + ( 13000 – 12000 ) = 14000

July 15, 2013

S&P 500 and TSX advance

The S&P 500 broke resistance at 1675 but the short candle indicates (short-term) selling pressure. Follow-through above the May high at 1690 would confirm the primary advance, with a target of 1800*. The 21-day Twiggs Money Flow trough above zero indicates medium-term buying pressure. Reversal below 1650 is unlikely, but would warn of another test of primary support at 1560.

S&P 500 Index

* Target calculation: 1680 + ( 1680 – 1560 ) = 1800

The VIX below 15 indicates market optimism.

VIX Index

The TSX Composite Index has advanced strongly since the bear trap below 12000. Recovery of 13-week Twiggs Money Flow above zero indicates medium-term buying pressure. Target for the advance is 12900. Breakout would offer a long-term target of 14000*. Reversal below 12000 is unlikely, but would signal a primary down-trend; confirmed if 11750 is broken.

TSX Composite Index

* Target calculation: 13000 + ( 13000 – 12000 ) = 14000