Watch What the VIX is Saying...

By: Marty Chenard | Fri, Mar 11, 2011
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The VIX is regarded as the Fear Index by many, so you would expect it to be screaming "Fear" after yesterday's market drop, the Libyan and Saudi troubles, and the huge earthquake in Japan.

It isn't ... instead it is showing that the market is acting like it is relatively undaunted by all the above concerns.

So, let's look at two VIX charts today, and discuss what the VIX is saying ...

Our first chart shows the VIX from June 2010 to 12:57 PM today. Note that the spike on February 23rd. set the high for a new resistance line from July 2nd. 2010.

After that, the remaining action created a triangular pattern which was a set-up for a VIX breakout.

The VIX broke out to the upside on Thursday, but notice what the daily bar did. (See both charts, the second chart is a close up of the action.)

What did it do? Thursday's bar went right up to and touched the 8 1/2 month resistance line and stopped. And then today, the VIX pulled back into the triangular pattern. (See where it was at 12:57 PM in the second chart.)

So, for all the concerns that have plagued the market this week, the VIX is remarkably calm and suggesting that the market may have the gumption to climb a wall of worry. The odds will favor that possibility as long as the VIX remains below the June 2010 to March 11 resistance line.

VIX Volatility Index

Friday's 12:57 PM close up chart for the VIX.

VIX - Feb 22nd

 


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Marty Chenard

Author: Marty Chenard

Marty Chenard
StockTiming.com
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Marty Chenard is an Advanced Stock Market Technical Analyst that has developed his own proprietary analytical tools and stock market models. As a result, he was out of the market two weeks before the 1987 Crash in the most recent Bear Market he faxed his Members in March 2000 telling them all to SELL. He is an advanced technical analyst and not an investment advisor, nor a securities broker.

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