TVO Market Barometer 4/13/17

The VIX has been on the rise, but some folks are saying, “Yeah, but the current VIX price isn’t really that high compared to the last time it skyrocketed… therefore it must have room to run!” Well, if you’re going to measure the VIX like a technical trader, then why not measure it technically, rather than historically? And technically speaking, the VIX usually doesn’t stay extended far above its 10 day moving average for very long. So if it’s extended, then that must mean it’s going down soon, right? That is ultimately for you to decide. True, we are very technical, but all of our trading decisions are based on volume and market internals, and right now our General Investment Strategy (GI) has shifted to “sell” mode. Yes with an extended VIX, the bulls case for a bounce is strong, but the market needs a bit of a re-affirmation at this point to weigh in for the long haul. Some accumulation at this level would be good sign for the bulls as a spark of significant volume here could very well turn things around. If it doesn’t spark soon, though, expect to see many more technical levels get tested before all is said and done. -MD

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