A Large VIX and NYSE New Lows Scenario Will Be Resolved Very ...

By: Marty Chenard | Mon, Dec 31, 2012
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Can the stock market and the futures market be telling two different stories?

Two different stories ... That is what the (daily) NYSE count of New Lows versus the VIX is saying.

The New Lows is a reflection of the stock market, and the VIX is a reflection of the futures market because it is a calculation of the expected movement of the S&P 500 index over the upcoming 30-day period based on option activity.

So, given the above, here is what the two different charts are saying ...

This first chart show's the NYSE New Lows. Its reading on Friday was 25, so there was no evidence of panic selling or fear because any count under 28 is Positive. Please see the next chart ...

NYSE New Lows

This second chart show's the VIX. Note how this picture is totally different than the above picture of the market. On Friday, the VIX moved higher, and was above both a fan line and above our historical 19.83 resistance level ... so fear levels were increasing.

Bottom line: There is a large differential spread between what these two indexes are portraying, and that differential will return to normality soon.

That means that either the VIX has to shoot up higher (a market down condition) with the New Lows rising in tandem, or the New Lows have to remain very low with the VIX dropping. Expect one of these scenarios to happen very soon.

S&P 500 Index

*** Happy New Year and we will see you on Wednesday.




Marty Chenard

Author: Marty Chenard

Marty Chenard
Asheville, NC 28805
Tel: 828-296-1200

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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