I don’t often use volatility as a timing indicator, but we’ve got a promising Hidden Pivot target in VXX that could conceivably serve that purpose. So far, VXX, an equity-based ETF that that tracks short-term S&P 500 volatility, has done a good job, keeping us properly bullish on stocks as we wait for it to sink to a very compelling bear-market target. Because it moves more or less inversely with the S&Ps, a falling VXX would indicate a continuation of the steady uptrend that has characterized the bull market in recent months. Nothing kills volatility like a month or two of ratcheting upwardliness followed by a month of sideways. That’s how things have been going since February, and so it’s no surprise that VXX has recently flirted with record lows. We should also tune to AMZN, a key bellwether that cannot but telegraph price action in the broad averages. If AMZN were to be trading around 1083, a potentially very important Hidden Pivot resistance with the potential to cap the bull market, at the same time VXX is banging on its respective downside target, that could be the bell that’s not supposed to ring at market tops.
Will This Bell Ring at the Top?
- July 11, 2017, 5:57 am
The breakout in VIX was in early to mid April which we saw 9 consecutive closing days over its 200 DMA. This was a signal towards value levels that are then benchmarch to observe over the future time periods.
The recent slightly high higher are ‘overshoots’ to the larger degree in market timing. VIX is not really about volatility as many see it, but more so of observing when most start or see in the present time period ‘little or no volatility’ is seen for the future, and they place the bet.
Such is the case being comfirm in VIX as it climbs higher over time along with equity price level even though how small these increases are. VIX has been on a death march and to the larger degree for could see the longer term changing formation in place now (as it should be), as its closing over its 50 DMA over the last 7 trading days while nesting equity values are seen as being at a comfortable level in pricing.
Nothing can be further from the truth.