• vix--x

Just when you think the market couldn’t get any more parabolic…It totally redeems itself!

I came into the day net-long, but wasn’t expecting to see a 24 point rally out of SPX, a 70 point rally in the Nasdaq and a 2% rally in the Russell. However, that is exactly what we got, and while it doesn’t pay trade on principal or conviction, it does pay to trade in the direction of least resistance and right now that is higher for equities. 

It is appearing more and more likely though that the market in general won’t stop this rally until the VIX hits the 11-12 range, which has been the place, all year long, where the stock market has sold off time and time again. Today the VIX has shaved off another 6.5% to around 14, so there is room still for this market to still rally. But once price creeps back to the 11-12 lows on the VIX, holding a huge collection of longs could result in a painful ordeal. 

So watch the support on VIX – it has been a serious detriment for the bulls all year long and could do it again here before the end of the month. 

Here’s the VIX chart analysis:

vix--x

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