The Volatility Index (VIX) is losing support with a Ready Aim Fire!® (RAF) buy signal suggesting a potential bounce. In the past we’ve seen when the Volatility Index bounces, it tends to send the market to the downside.
With the VIX losing steam, the market may unfold the same way it did last October and roll over to retest the lows.
Will history repeat itself? Maybe, but we need to be ready for the market’s next move.
After seven days of uptrend with low volume, the market is extended and trading at previous all-time highs (ATH). As the S&P 500 (ES) approaches a level of resistance at its ATH of $4,551.50, we’re looking for a dip to the 21 exponential moving average (EMA).
Rather than focusing on which move is next, look for signals and shifts of momentum that can support your position. Remember the current market conditions we’re in:
- Market is extended
- S&P 500 is at previous all-time highs trading at 2+ average true range (ATR)
- Volume is low on the push higher
- The VIX is at major support trying to print a buy signal
In today’s video we’ll review last year’s moves in October and determine where to position ourselves, and whether we see a big flush or spike next.
Stay Focused!