Saturday, May 22, 2010

My intrepretation of VIX volatility index

  The   VIX  has  officially  started  the    UPTREND .     Here’s  how I see it :


a.         The   moving  averages  has   aligned  in  the  perfect   alignment  of  20 day EMA > 30  Day  EMA > 50  Day  EMA >200  Day  EMA
b.        The    MACD  is  showing  a   positive  Divergence   of less  negative  lows  and   more  positive   highs. I    have  highlighted them  in the    picture  with  the  trendlines.
c.         We  see the  formation  of  a  broadening  which  usually in the context  of a  downtrend  signifies  trend reversal   i.e.  a shift  to    uptrend   thus   lower stock prices.
d.        Prices  are  following the  blue  UPTREND  Line  I    have  drawn.



a.        The  Bullish  Price  Objective  is  56    as   seen in the chart.
b.        Prices  Broke  the  long standing  RED   down  trendline which  started  back  March  '09   .Now  prices are supported  by  a new  UPTREND  blue  trendline.
c.   This   uptrend    seems   more  meaningful  this   day  when  compared  to all its   previous  attempts  because    Prices  made  a HIGHER  HIGH
d.     Advanced   P  & F    analysis   suggests that   VIX is   one  a relative  strength
BUY   wrt the    entrire  market   implying more  DOWNWARD  PRESSURE  for the  stock  prices.

1 comment:

  1. What is your comment on the VIX action today?
    Are we ready for a short term rally?