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swingtrader

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Reply with quote  #1 

Fib,

 

I was looking at your VIX and VXN chart you posted a while back and I found it is interesting that, $VIX has broken the 89 bb center line and stayed there for 2 sessions. Do you think this cause some concern near term in regards to the bullish case?

 

Thanks

 

ST 

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mortiz

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Reply with quote  #2 

ST,

 

Hopefully Fib weighs in on the VIX/VXN configuration, but have been noticing the same thing you have with the volatility indices, particularly VIX and VXO, flirting their traditional upper Bollinger Bands (20 day MA, 2 standard deviations) while their associated prices are chopping around in recovery high territory.  Hopefully Scott (MSS), who does some great work in this area, will throw in his two cents as well.

 

I've also noticed some higher than normal volume in VIX calls (very little put volume) with a near even split in the VIX OCC volume between the retail customers and the market makers/brokerage firms. 

 

The OCC doesn't provide which side of the call transactions (short or long the calls) the retail customers or market makers/firms have positioned themselves, but suffice it to say if the market makers/brokerage firms are playing the long side of those VIX calls, could be rough sledding for the bulls in the near term.

 

We'll know soon enough.. with futures/options expiration week straight ahead.

 

Randy

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fib_1618

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Reply with quote  #3 
Quote:
I was looking at your VIX and VXN chart you posted a while back and I found it is interesting that, $VIX has broken the 89 bb center line and stayed there for 2 sessions. Do you think this cause some concern near term in regards to the bullish case?

Possibly. Let's take a quick look at the data.

As you've mentioned Yanchen, the VIX data did move above its 89 day moving average a couple of days ago which would, strictly speaking, indicate a probable change in the direction of the current intermediate term price trend established back in August. But if we look at the VXN data, we still remain below this same moving average causing a non confirmation between these two pieces of data.

Now even though history has shown that the VIX does tend to take a bit of a lead over the VXN when it comes to the development of any new price trends, we also have to consider that with the expectation of the 20 week cycle low ideally due to bottom this coming Tuesday, this recent VIX violation, along with the VXN not confirming this same violation, could be indicative of this particular 20 week's nesting influence.

There are, of course, other considerations that come to mind (the high levels of the MCSUM's and the Open 10 TRIN's just to name a couple), but it might be best served to wait just a little longer before being concerned with not only the short term, but also the intermediate term bullish case and first see how things sort out next week.

Fib








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"As for it being different this time, it is different every time. The question is in what way, and to what extent" - Tom McClellan

"An economist is someone who sees something happen, and then wonders if it would work in theory" - Ronald Reagan

"What we see depends mainly on what we look for" - John Lubbock

"The eye sees only what the mind is ready to comprehend" - Henri Bergson

“Answers are easy; it’s asking the right questions which is hard” - Dr. Who - 1977

"You know the very powerful and the very stupid have one thing in common - they don't alter their views to fit the facts, they alter the facts to fit their views (which can be uncomfortable if you happen to be one of the facts that needs altering)" - Dr. Who - 1977

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mss

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Reply with quote  #4 
From the charts I use , we have a direction change coming within two weeks. As "fib" suggests this week should give us a good indication of just how soon.

I have not found a way to use the VXO as a precise timing tool. There are several methods, used together, that will give you a visual indication of a direction change. Staying objective, you can get close to when that change will occur. The last chart is work in progress, so view it with a grain of salt. Charts got out of order, sorry.

DIVERGENCE in price and VXO appears to be the key to detecting price change. Below are several charts that should be self explaining. I also refer you to my post below, "IS THIS A WARNING". Am working on a new set of weekly charts that look promising, but time has not allowed me to finish this post. later , I hope.











Comments welcome, best to all,
mss
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mss

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Reply with quote  #5 
Just a quick update.



mss
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fib_1618

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Reply with quote  #6 
Quote:
Now even though history has shown that the VIX does tend to take a bit of a lead over the VXN when it comes to the development of any new price trends, we also have to consider that with the expectation of the 20 week cycle low ideally due to bottom this coming Tuesday, this recent VIX violation, along with the VXN not confirming this same violation, could be indicative of this particular 20 week's nesting influence.

It would seem that with today's price breakouts on many of the major market averages that the 20 week low came in on schedule on Tuesday of this week.

I've updated the volatility charts below and added a couple of annotations to the recent action.

It's nice to see that this method use of the volatility data continues to compliment the breadth and volume figures, as well as the 9 month cycle work, in an extraordinary manner.

Fib






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"As for it being different this time, it is different every time. The question is in what way, and to what extent" - Tom McClellan

"An economist is someone who sees something happen, and then wonders if it would work in theory" - Ronald Reagan

"What we see depends mainly on what we look for" - John Lubbock

"The eye sees only what the mind is ready to comprehend" - Henri Bergson

“Answers are easy; it’s asking the right questions which is hard” - Dr. Who - 1977

"You know the very powerful and the very stupid have one thing in common - they don't alter their views to fit the facts, they alter the facts to fit their views (which can be uncomfortable if you happen to be one of the facts that needs altering)" - Dr. Who - 1977

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