The Only Chart That Matters

It’s pretty simple, really.  VIX got SPX up to 2872.  It got it back down to 2580.  If it’s not stabilized right here and now, SPX is going lower.Fortunately for the bulls, VIX made a lower high yesterday.  SPX didn’t care.  It made new lows anyway.  Because, after years of being tweaked by VIX managing to go just a little lower when needed, the algos need to see VIX stop rising at all before they’ll trigger any buying.

The inverse VIX ETFs have thrown a 300-pt monkey wrench into the works, forcing buying that would otherwise have dissipated by now.  But, one has to ask: where are the central bankers?  We know they have hammered VIX in the past in order to prop up stocks.  Will they come through this time?

And, if so, what about the dollar and, by extension, the USDJPY — the other factor which, along with oil prices, engineered the post-US election rally [see: Why the “Trump Rally” is a Fraud.]

Oil and gas hit our downside targets moments ago, providing one more measure of support for stocks which are desperately in need of it (update coming.)Will it be enough?  Not if VIX can’t be wrestled under control.

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