Tuesday 27 August 2013

Volatility on its way to the 20s

With equities seeing consistent weakness across the day, the VIX finally managed to break above the recent 16.56 high, settling +11.9% @ 16.77 (peak of 17.13). Near term trend looks to the upside, and the big 20 threshold looks set to be tested in the coming few days.


VIX'60min


VIX'daily3


VIX'weekly


Summary

*a note on the weekly cycle, which has initial resistance of 20/21. A weekly close in the 21s..or higher..would be a key warning of 'serious market turbulence'.

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For the bears, today was a significant victory. Not only has the threat of a return to the sp'1680s now clearly been removed, but the threat of sub sp'1600s is now on..along with VIX in the 20s.

Regardless of how Wednesday might open - and there is the real chance of a minor bounce in early morning, the bigger trend is clearly in favour of equity bears.

Weekly index charts..target : sp'1570/60s..with VIX in the low 20s.
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more later..on those indexes