Wednesday, January 18, 2017

Reviewing VIX Index – Last 5 Sessions Candlestick Analysis; 10 Year Look Back

·        January 11th: Bullish Inverted Hammer
o   Continued to hold modest bullish window of Dec 22-23
·        January 12th: Long legged Bullish Inverted Hammer
·        January 13th: Bullish Hammer Bottom – New Low Settle since mid-2014
·        January 17th: Bullish Inverted Hammer/Gap Higher created a Bullish Window (Jan 13-17)
o   Confirms the bullish implications of the Jan 13 Bull Hammer
·        January 18th: Bullish Engulfing (Jan 17-18)
o   Further supports the trend change to bullish. 

Brief comment on VIX; January 13 set a new low close since mid-2014.  The 10.73 close in June 2104 closed a bullish window dating to Feb 26th 2007, which was about the time that a good number of traders recognized that the financial crisis was underway.   

At this stage, we should be mindful for the strong prospects of some modest (or pronounced) bearish retracement in equities and a jump in VIX.  There has been a very engaging ‘risk-on’ adventure for many who do not know why they climbed on board the moving train.  There will be stops and even back-up to sidetrack in the bullish advancing equity price action seen over the next months.  The uncertain rider is expected to depart when the train slows. 

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