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The charts, graphs and comments in my Trading Blog represent my technical analysis and observations of a variety of world markets...
* Major World Market Indices * Futures Markets * U.S. Sectors and ETFs * Commodities * U.S. Bonds * Forex

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Thursday, August 20, 2015

SPX:VIX Ratio At The Brink

* N.B. See Friday's &  Monday's UPDATES below...

Thursday, August 20th:
Note the aggressive selling on the SPX when the SPX:VIX ratio gets up to the 180 level. A drop and hold below the 100 major support level could spell big trouble for the SPX and the other Major U.S. Indices.

With the Momentum indicator in a downtrend on this timeframe, I wouldn't be surprised to see a larger pullback occur in the equity markets. Watch the 2038 level on the SPX, as mentioned in my post of August 14th, for confirmation.

SPX:VIX Monthly Ratio Chart

As well, we should see a bearish moving average Death Cross form on the World Market Index, possibly as soon as tomorrow's (Friday's) close...see my post of August 19th for more information on this, as this (along with upcoming action in Chinese markets) could very well weigh heavily on U.S. markets.

World Market Index Daily chart

* UPDATE Friday, August 21st:

Failure to hold the 60.00 level on the SPX:VIX ratio chart could cause some panic selling in equities, as I mentioned in last year's post of October 15th, 2014. Price closed just above 70.00 today (Friday), as shown on the following Monthly chart. The Momentum indicator is now sitting at the lowest levels seen in the past 20 years...an ominous sign of things to come.

SPX:VIX Monthly Ratio Chart

As far as the World Market Index is concerned, price fell further today, but I was a day early in the bearish moving average Death Cross formation -- that will likely happen on Monday -- forecasting another "sell" signal for world equity markets.

World Market Index Daily chart

* UPDATE Monday, August 24th:

Here's a look at how World Market Indices closed today...the selloff began overnight in Asia and continued into the rest of world equity markets, where, approximately, $5 Trillion in profits were wiped out.

World Market Indices

Price closed today well below the 60.00 major support level (mentioned above)...and, as you can see from the data above, the percentage world market selloff was considerable, including that of the U.S. equity markets. Look for more of the same, as long as price on this ratio chart remains anywhere below the 110.00 - 60.00 range...the Momentum indicator continued its plunge to even lower 20-year levels, as well, today, to signal more volatility and weakness ahead for the SPX.

SPX:VIX Monthly Ratio Chart

We finally saw a bearish moving average Death Cross form today on the World Market Index, forecasting further weakness and another "sell" signal for world equity markets.

Price has dropped below its first major support level of 1700 and appears to be headed towards the next one at 1600. Whether this continues to plunge without a small bounce in between remains to be seen.

World Market Index Daily chart

I'd also include the following 1-Year Daily chartgrid of Foreign ETFs. The daily ATRs (average trading ranges) are shown in white along the bottom of each chart. Today's extreme spike in range tells me that we are seeing the beginnings of major volatility and weakness entering these ETFs...confirming what the above charts are forecasting.

Foreign ETFs 1-Year Daily charts