With the markets' rally this past week I wanted to look and see if the VIX was telling us anything. To me this looks like nothing more than a healthy correction and it has 3 key things going for it that signals the downtrend in the markets is going to resume.
I can also say this with my proprietary indicators remaining bearish and I believe if this market was really going to take off to the upside I would have already received a buy signal.
- 34 EMA support has been strong. Yes we breached it on Friday, and it could just as easily fall to it’s 50 EMA. But so far no warning signs there.
- RSI has remained above 40. Typically the fluctuations between 40-80 are normal for a bull market.
- ADX has remained positive and extremely strong.
(click to enlarge)