VIX Watch: Uptrend Could Still Continue

I’m not ready to stick a fork in the VIX yet, but some further declines could hit this indicator and still not interfere with its current uptrend. Two things to keep an eye on in this chart (click to enlarge):

1. Bottom trend-line indicated below
2. RSI values between 40-80 which indicate an uptrend. We’re currently at 51 and change and I’ll admit this chart isn’t looking so hot, but by historical standards it’s still extremely strong or overbought, however you view it.

It’s funny how you don’t hear the media talking about this everyday like they were. This might have to base for a while before it makes another run to new highs and if that’s the case then the market will likely continue higher or possibly sideways.

Seems there is a number of different ways the market can go here making it quite difficult to analyze the current data.

Comments

[Urbane Gori...:]

Nice viewpoint. However, we also have a dropping RSI, a break through the MA20 with the MA50 a fair distance below, a dropping Stochastics and a negative MACD crossover.

The reason the press hasn't been paying too much attention to the VIX lately, is that at a top close to 90, they probably didn't want to excite people.. If it cranked up past 100, they'd have to print taller charts..

jegan

2008 Nov 02 03:11 PM

[Augustus:]

try a chart with the 10 dma, and a 10,50,10 macd histogram, then look at the $RUT at the crossover points.

Declining VIX indicates declining fear, still very high but declining.

2008 Nov 02 10:26 PM