Saturday, March 7, 2009

VIX Weekly = Bear Hibernation NOT confirmed

Id like to preface this by saying i do NOT think this
anaylsis will be "on the money" for catching the "perfect"
tradable bottom.

However i do believe it will be very
helpfull in CONFIRMING and being able to differentiate
a "little pop" from a "REAL RALLY". So unlike Sandford
& Son...we can have a strong conviction of when the "big
one" really is upon us if you will.

I am a firm believer and trader of the Weekly chart "always" trumps the daily chart, as from my experience it virtually always does.

What we have here is since the low volume late dec-early jan "january effects" rally, the vix has been in a very pure, slow and steady technical UP-trend, and the spx has been headed lower, and lower and lower.

Every prior vix peak (temporary spx bottom) in this current bear market has caused the vix weekly to puncture THROUGH the top of the bollinger bands. (will this one follow that golden rule?) (thanks kenny, for observing that first)

I will be watching the shorter term macd's to FIRST crack below their current support lines to move out of the bear camp, and the rsi to confirm it after.

Impression: from a technical perspective, the vix remains in a strong medium term UP-Trend, and that is to be respected, untill violated.

- When the t/a support on this breaks down (whenever that happens to be????)....i will be looking for a spx rally, to be confirmed as "real" and a "strong" one at that.

- When the bear looks like he wants to go into a temporary hibernation, he will tip his hand, and clue us in....


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