VIX falls near its recent low and is nearing the 15 level which marks the Complacency entry mark..
Given the lows around 9 - 10 in 2007 where market was roaring in the 'Good times' it turns that market has remained most of the last 8 months in a state of relative balance and is going into an even more relaxed state.
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S&P 500 is holding nice gains after it corrected 9% in January.
The major index is trading in an Rising Wedge pattern and current target is around the key 1200 level which is in confluence with the 200-Week MA at 1227.
Both RSI and MACD are turning up supporting the move and the 50-Week MA is tracking nicely the Uptrend. This a great educational experience to have 1 straight year of roaring trend while we incessantly hear of a new crash, crisis, depression... Trade the trend!
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USD index is playing the indecision game for 4-th week right on the 200-Week MA at 80.39.
The technical picture shows that DX is trading inside a clear Uptrend Channel. However in the present moment it is a range play capped by the long term important 81.40/50 level and downside is holding around the 79.50 (Trendline Support) and 79.17 (50-Week MA).
Since the last Weekly settlement was at 80.46 I'd suppose a test of the Support layers in the 79-80 region (which might translate into EUR/USD test of 1.3750-1.38 levels) before DX tests the upside.
50 week in DX seems like a good idea and would be a 2nd not a secondary but a 2nd retest . the recent cot report shows many have closed off their short euro positions and this explains the recent chop in that the longer temr usd bull has walked right into profit taking. a re-test of the 50dma would also probably be a good place to re-enter long usd looking for the highs ti be taken out in a 5th wave
ReplyDeleteIf the S&P is headed higher then a vix collapse to the 9-10 mark would likely signal and end of the upmove. Interestingly enough the elliot wave guys probably have a hard time countin the waves for wave 3 off the March 09 low is 10+ points shorter than wave one so the coubnt apparently should be ABC and the only question therefore is where does it end to create a large wave 4 and the vix might be the answer
ReplyDeleteVIX has been over extended to the downside.
ReplyDelete