I was sure I posted the VIX ABCD, but I guess I requested someone do it, and if they did, I missed it. Anyway, I mentioned in my last commentary to do the work on this, and also in the 'Jim's Thoughts' section. This was a key reason I was ready for the selling to start.





I chose the 405-min, which is one day's data per bar, because the daily chart had an unfiltered bad tick on it. The second horizontal red line is from the previous peak, but to show the peak I'd have to scrunch the chart up too much, so just look back at your data and you'll see it. So, there was a big ABCD coming together right on top of the previous range top, with a spike line in there, or if you don't think it is a spike line, it's a line of some sort. There is also a modified Schiff division line right in there, too (not shown). I just showed the basics here. I also tossed in that sweet 1.272 high that clued me in to the big market bounce, and that 1.128 that also showed the level of the second shoulder in the head and shoulders top.

So, the ABCD did give a reaction, the selling started, and now we are in the first area of interest here at a key .382, and it started to come in and the market started to rally, dead off obvious areas (see roofer's great chart on the SPX and that lower // as one example). I do the same work on the VIX as I do on anything else, and this one gave me clues way before the selling started. I hope everyone in here, and everyone that read my last commentary was as ready as I was for this to potentially play out, but probably only a few did the work...

This will be very interesting to watch, as sentiment shifts here once again. Will it last? We shall see.


Chart created on QCharts, courtesy eSignal.

The VIX came right off trend and started moving back up here as the market sells. Now we see if they are serious, or if this 'retest' of the 1/15 low is it. Keep an eye out, too, for a 1.128 or 1.272 'retest' back at the standard ML set lower // on the SPX (that roofer showed) that this thing took off from, which was also a key 1.460. That is, if they don't ramp it off this .886 here. I have a major uptrending lower // right here.

Okay, that lower // and 1.128 area here, now we see...

1.272 now hit, and both lines slightly exceeded. If they can't turn it here, then I would think 'swoooooosh'.

And right on cue they come in. I can't imagine they'll be able to do much more than a little short covering, but we'll see.

Amazing, at least to me. After an .886 test on a gap day, up they went, right off the area mentioned in the last few posts. It doesn't get easier, or sweeter, than this, in my opinion.

Not sure if/how this would come into play, but I am watching it.

Well, how it could play in is if we do in fact bounce from here like all the hold-over-night daytraders and oversold purveyors say, then the 4-Point could send the VIX down, and off the market goes. It is something I am aware of, I'll tell you that.

quote:

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Originally posted by jimkane

Well, how it could play in is if we do in fact bounce from here like all the hold-over-night daytraders and oversold purveyors say, then the 4-Point could send the VIX down, and off the market goes. It is something I am aware of, I'll tell you that.

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Yep, that's exactly what it did.

Interesting article here:
http://blogs.wsj.com/marketbeat/2009/03/17/fortysomething-a-tale-of-the-vix/

Something really odd is going on with the VIX. Market is down almost 200 and the VIX is down. When they started to sell at day's end, the VIX barely budged, and then came right back down to near the LOD. This is extremely odd to me. It wants to break below that 40 ledge that goes so far back. That is something it would do if the market was breaking to strong new highs. When the VIX drops to the LOD as the market drops almost 200 to the LOD, it says the sellers have zero fear of selling downside protection to others. This says to me someone big knows an artificial ramp is already preset in the cards. Just a thought. Not sure what is going on, but it is very, very odd to me.

quote:

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Originally posted by jimkane

...This says to me someone big knows an artificial ramp is already preset in the cards...

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See? IMO, they knew.