On Friday The VIX went up 23.95% while the market fell well over 2.5%.
VIX is a popular measure of the implied volatility of S&P 500 index options. Often referred to as the fear index, it represents one measure of the market’s expectation of volatility over the next 30 day period.
With the upward movement in the past 2 weeks the VIX has successfully broken a trend line going back to November 2008
See Attached Image (Click To Enlarge)
The VIX also had a bullish candlestick pattern on the 2D frame (2 days per candlestick)
Defeniton of this candlestick pattern is quoted below from Candlesticker:
Bullish Three White Soldiers Pattern is indicative of a strong reversal in the market. It is characterized by three long candlesticks stepping upward like a staircase.
And finally the Hourly chart (Click to Enlarge)
What does the bullish Vix momentum mean? Well by itself it means nothing to me. But when combining it with the increasing TED Spread, Broken S&P trendline, Numerous bank failings each weekend and many more indicators then it all signals that things are not well and the jobless recovery is not going to last much longer.
As always use caution as these are my observations and I do not make decisions for anyone other than myself.
Happy Halloween! 🙂