Charts I’m Watching: Dec 22, 2014

Today’s action should be about new highs.  We’ve had USDJPY ramping, and now face the .618 at the white channel midline which remains the line in the sand…

2014-12-22-USDJPY 60 0615…and, SPX testing its former ATH…

2014-12-22-SPX 60 0615…all in an effort to leave the 1.272 in the dust.

2014-12-22-SPX daily 0615One of the major constituents in ramping SPX ever higher is, of course, VIX.  Not too long ago, VIX was a measure of what stocks had done — a reflection of the volatility being exhibited in the market.

As we’ve discussed many times, it is now a determinant of stock prices — one of the tails wagging SPX’s dog. It’s one of several tools at the Fed’s disposal to ramp stock prices higher.

As such, it was a bit of a head scratcher when VIX slid below the purple .886 and purple channel line in late November and again in early December.  The subsequent rally above 25 in the middle of the month, however, suddenly made sense of the earlier drops: a falling channel, shown below in white.

2014-12-22-VIX daily 0650Today, VIX is dropping below the midline of that channel, and should continue falling — at least until our upside targets are reached.

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