ChartsEdge map for 4/22; and how my volatility index charts are looking now

Market Map for April 22

Posted: April 21st, 2009
Author: Mike Korell
Filed under: One-Day Market Map Comments to ChartsEdge »


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Thanks again, Mike and ChartsEdge! and folks - I wasn't able to get their charts posted the past two days, only because I traveled without a computer and my iPhone wasn't enough to enable me to post graphic images onto this blogspot.
Here are my own volatility index charts, how they are looking now. First my long-time VIX chart. You can see how Monday was a huge move up after the VIX reached that .786 Fibonacci retrace level I've discussed a lot recently. Then yesterday was a pullback (partial retrace of that). The StochRSI moved above its midline Monday, and might have just moved to test that midline yesterday. But the standard RSI (top indicator) just moved up testing 50 Monday and dropped back a bit. Really, I don't expect the VIX to drop under 33.81 again, unless it's simply to resonate some more around that level. (Then again, when I hear folks on TV recommending SDS and SKF, I've got to wonder if sentiment got too bearish again too quickly!)

For short positions that may have been entered Friday (such as SDS or SKF, whatever) - if being held as a swing trade, it seems logical to use Friday's high as a stop level, based on the hypothesis that Friday marked a high for the rally and a high for confidence (i.e. low in VIX).

Now - here are my VXO charts, which I've "kept up" more with nearby trendlines (because VXO may be a more pure indicator, some believe). You can see that Monday and Tuesday morning, it tested into the same trendline that it had previously broken and retested back to over the past couple of weeks. Here again, as with the VIX - I'm keeping an eye to see whether or not it "respects" Friday's low. This will be a very important "tell" for me on the market.

And here's the same VXO chart, stepping back so to speak to see the longer-term "big picture".

Let's not forget the ChartsEdge weekly forecast actually did show the (U.S.) equities markets moving to a new rally high by this Friday. Theoretically I could see it happen, even if the volatility index doesn't plumb a lower low - we already know that equities don't always move exactly inverse to the VIX.

So with the VIX, as well as with equities, we'll continue to keep an eye on other indicators. And I'll be posting more charts about those, later today and later in this week (many at my UBTNB3 trading-charts blogspot, see links at right side of the page). Meantime, careful out there as always, and happy market navigating!