VIX Analysis July 2015 (D,M)
Created on Sunday, 28 June 2015 01:54
Written by Austin Galt
We have been waiting patiently for blast off in the VIX and that wait looks set to end in July. Let’s update the situation using the daily and monthly charts.
VIX DAILY CHART
We can see the 5 point broadening low denoted by the numbers 1 to 5. The pattern may be complete but I favour one last final marginal false break low to put in the point 5 low.
The horizontal line denotes a previous double bottom at 11.52 which I expect to support price. The expected point 5 low should challenge that level before price turns back up and explodes into the stratosphere.
The RSI already has a bullish divergence in place while I expect one final price low to set up a triple bullish divergence. Let’s see.
The MACD indicator looks to be threatening a bullish crossover. That is imminent in my opinion.
Let’s move on to the monthly chart for some Voodoo action.
VIX MONTHLY CHART
The major low back in July 2014 was accompanied by multiple bullish divergences in the RSI which suggested it was a solid low.
I have added moving averages with time periods of 100 (red) and 200 (black) which are now in bullish order with the red line above the black line. And this is the monthly chart no less.
I have drawn three Fibonacci Fans from the 2008 high to consecutive lower lows set in 2010, 2011 and 2012. The point of this is to show that price is currently right at a cluster zone of these angles. This is serious resistance which price is gradually overcoming.
I think price will finally overcome all these angles this coming month in spectacular fashion. I have drawn Voodoo style the candle for July as I expect to see it. It calls for a low marginally below previous month’s lows before turning back up and closing the month in a strong position. This would create a bullish outside reversal candle and set the stage for further gains over the following months.
I have drawn a horizontal line which denotes resistance from the double top at 48. We can investigate whether or not price is likely to bust above this level at a later stage. All in good time.
Summing up, the countdown to launch is now in the final stages. 3, 2…..