S&P Market Overview With Volatility (Daily & Weekly)



This is the Daily period of the S&P 500. Isn't it a thing of beauty? Look at where we are. We closed at 879.13 today. Gee, what a surprise. Like I said earlier, we are at a pivot point and traders are testing this area.

This truly is a lovely pattern. If it cannot hold here, the next levels down will be: 857, 804, 748, 666. There may be some interim hesitation periods on the way down between those numbers. This is getting exciting to me.

The bottom pain is the VIX, which is volatility of the market. This is inversely proportional to the price action of the S&P.



This is the WEEKLY view of the S&P 500. This chart is even more beautiful than the daily as we get to see a more global view of the market. Another trader on Twitter pointed out this is the 4th week in a row the SPX has closed lower than the week before, so I decided to check out this view.

Notice the double tops? Isn't that excellent? This sort of looks like a "stick bird", which is another version of the "M". Not sure if there is a "rule" for this or not, as I've not seen this view before or recognized it. In order for the pattern to complete, the SPX would need to get to 803.

HOWEVER, as I turned this into a line format (closing prices), I now see an inverted head & shoulders (H&S). It could bounce from here and attempt to go for the 950 area again.

Either way, I'm a daytrader and I'll just go to wherever it feels like going.

Let's take a look at the VIX:

It's current week's VIX is near 29-30. The support is around 26.

What are times it was in the VIX = 26 range? 6/12/09 @ 946; 3/28/08 @ 1315. There is a difference of 369 points. That's a lot.

What is VIX telling me? The market doesn't believe right now it's going to tank. Volatility, relative to the past year, is low. However, I believe if things really close below 857, volatility will begin creeping up. Surely if it goes down to 800, it will rise some more.

Even if it does hit 666 again, volatility was at 49-50. As opposed to when it was at nearly 90 in October when it was 850-985 range, which is higher than where we are. Of course, the market has had time to adjust to falling prices. At that point, it was fairly new. Now we've had all of 2008 & 2009 to adjust. Though people don't like these low prices, they've accepted where we are, so it's less fearful.

The real fear will begin if we fall below 666 and close below this number.
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