VIX tagged 18.32 this morning which, as Brett and ewtnewbie point out, is the Fib .786. of the current (red) grid below. This makes a nice turning point, but also because:
- it represents a tag of the upper bound on VIX’s daily RSI channel
- it tags the falling wedge upper bound
- it tags both a yellow and a red channel line
Remember, we’re still looking for the previous H&S pattern to play out (dashed white neckline, nominal target is 11.48.) In the meantime, we just completed another H&S pattern (yellow, dashed neckline) that targets an improbably low 5.5. Where are we likely to go?
continued…
The falling wedge apex is way down around 9 in early September. Wedges typically give up the ghost around .618 of way to their apex, so this targets around July 25 — the point at which I’d placed our Point D.
Even with all these single digit targets, VIX is probably most likely to bottom out in line with the trend line it seems wedded to. It’s the yellow, dashed line at the bottom of the following chart and indicates a low of about 13.66.
It’s a little easier to see in this chart.
Comments
7 responses to “Update on VIX: July 9, 2012”
question – if VIX turns at 13.66 and begins a superspike of sorts, how does the Dollar fare? mirror 2008 as well (before later racing lower)?
Not sure if you saw my other post in another forum/blog: got a little less than half my fill of SSO below 1348 today, so I’ve got enough to enjoy a ride up to near 1400, but would love to load up the rest down at the 50day MA in the low 1340’s. Great stuff as always PW. I’ve made an alert for VIX at 13.75 to consider selling.
I imagine you’ll be happy with that trade.
Enjoying your posts very much!
it tags both a yellow and a red channel line Are your colors meaningful beyond just helping see the channels? Are your channels color coded in relation to Bat, Crab, etc. formations you have in mind that I missed?
Nope. The colors mean nothing in and of themselves. I use different sets of colors to identify trend lines with the same slope — i.e. channels.
Roger that, thanks!