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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

N.B.
* The content in my articles is time-sensitive. Each one shows the date and time (New York ET) that I publish them. By the time you read them, market conditions may be quite different than that which is described in my posts, and upon which my analyses are based at that time.
* My posts are also re-published by several other websites and I have no control as to when their editors do so, or for the accuracy in their editing and reproduction of my content.
* In answer to this often-asked question, please be advised that I do not post articles from other writers on my site.
* From time to time, I will add updated market information and charts to some of my articles, so it's worth checking back here occasionally for the latest analyses.

DISCLAIMER: All the information contained within my posts are my opinions only and none of it may be construed as financial or trading advice...please read my full Disclaimer at this link.

Dots

* If the dots don't connect, gather more dots until they do...or, just follow the $$$...

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Vintage Xmas

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Sunday, November 13, 2016

The Rocky Road of the SPX:VIX Ratio

Well, since my last post on the SPX:VIX ratio, we find that, after true-to-form recent volatility in between 150 and below 100 to just above 90, it has, once again, spiked upward, broken and closed above 150, as shown on the following Monthly ratio chart.

The Momentum indicator has rallied and is, again, back above the zero level, which now favours the bulls on this longer term timeframe.


As I've said many times over the past several years, a hold above 150 clearly favours equity bulls. Watch for an SPX breakout to new all-time highs in the near term (last new high is 2193.81).

For confirmation of such a move, keep an eye on whether the MACD and PMO indicators (which have both just crossed over to the upside), as well as the RSI indicator, break their respective downtrends, as shown on the following SPX:VIX Daily ratio chart.

No doubt, markets are likely buoyed by more unity in all three U.S. Washington political houses subsequent to the Trump/Republican win last week. While traders will pay attention to the future policies, implementation, and effects of those policies, this ratio should provide a good gauge of market sentiment and momentum conviction, as well as the strength and velocity of volatility.