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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...
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* 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.
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DISCLAIMER: All the information contained within my posts are my opinions only and none of it may be construed as financial or trading advice...

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Saturday, May 20, 2017

2nd Quarter Indecision on SPX:VIX Ratio

Each candle on the following chart of the SPX represents a period of one quarter. Much of the action on the current Q2 candle has occurred above the top one-quarter of Q1, and price is hovering above its close of 2362.72.

The Momentum indicator has been sluggish since July 2014 on this timeframe, likely caused by the rise in volatility, large price swings and inability of this index to gain traction, until its breakout two years later.


Each candle on the following SPX:VIX ratio chart represents a period of one quarter. The current Q2 candle is a high-wave candle and its range is 96 points. This is signalling extreme indecision in support (or not) going forward for equities in the face of rising high volatility.

Price on on the Q2 candle is hovering above the Q1 close of 191.004, but is below 200.00...a level which, I've contended (and written about) for some time, represents a new bull market in equities.

However, in order for price to break and stay above 200.00, volatility will need to calm down and remain low. We may need to wait and see how the Q2 candle closes at the end of June to try and gauge what market sentiment may hold for the remainder of the year. At the moment, it's anyone's guess, although you may see a last-ditch spike in price on the SPX before the Fed's next interest rate announcement and Fed Chair press conference on June 14.