Thursday, December 27, 2012

VIX >20...12.27.12

Today's news centers on the VIX rising above 20 for the first time since July 23.  This is a weekly chart with a few of my favorite technical indicators.  For active traders the 2 SMA8 lines on the chart are of the high and the low...creating a support resistance channel that is amazingly reliable fro reading new trend breakouts.  Note where the VIX is right now.
The chart has a yellow line overlay showing how TLT has historically reacted to the VIX and the point of interest is that TLT has never resolved back to the VIX baseline (like April 2011). This is a stark graphic view of the potential bond collapse that is contributing to market nervousness.
Of course things could turn around in an instant but the odds are looking increasingly with the bears.
Here's one doomsayer's comment.
And, just for reference here's a look at the SPY/TLT pair study supporting the bears once more.
Those of you that have the daily Market Rewind subscription can replicate these pair studies.