A faint light is often all that is cast upon truly outstanding positioning strategies before they ready. Fundamental analysis, awareness of monetary policy developments, positioning conditions and other trend characteristics followed allow candlestick charting analysis to shine needed illumination. Martin B. McGuire
Monday, July 20, 2015
Closed VIX Window Opens Bullish Door for S&P
On Friday, the VIX closed the bullish window dating from
early-December, paving the way for new gains in the S&P index (see ‘VIX
May Be Giving S&P Green Light’).Elimination of support in the VIX at 12.08 leaves some accounts over-hedged
for the prospect for a back up in the S&P.This should lead to some more aggressive equity buying today and later this
week.Further, we have learned that
leveraged funds are not so highly leveraged at this stage and could be expected
to add to their long positions on current bullish momentum.
The earlier strong sell-off in China’s Shanghai Index and
the major distraction from the Greece debt crisis both appear to have
passed.The Shanghai Index has repaired somewhat
and on technical conditions is expected to repair further (see ‘Shanghai
Readies for an Additional 22% Advance’).All eyes are said to be off Greece now and taking focus on the likelihood
for the Fed moving forward with policy normalization.
Despite some stepped-up nervousness about the likelihood
for the Fed firming rates, the S&P should not be expected to be held back
by a slightly less accommodative policy stance.In fact, it will likely be somewhat encouraged that the Fed is as
constructive as such a stance would imply.
May 20th marks the all time high of 2134.72 for
the S&P 500 Index.Currently the
index trades to 2128 and may better the record high today.In any case, it appears the VIX has indicated
that the pressure is off and longs can now more comfortably enjoy some decent gains.