VIX Analysis June 2015 (D,W)
Created on Monday, 01 June 2015 01:57
Written by Austin Galt
The wait for liftoff in the Volatility Index (VIX) continues but ignition thrusters appear to have been triggered. Let’s check that out using the daily and weekly charts.
VIX DAILY CHART
We have been waiting quite a while for the final low before price takes off and it looks as if price has formed a 5 point broadening low formation, denoted by the numbers 1 to 5, in order to make this last move last as long as possible.
The green highlighted circle shows a gap that has formed recently and I expect price to fill this in before launching higher. The bottom of the gap is 12.37 so that is my minimum expectation for price.
The Bollinger Bands show price is back to the upper band while I suspect one last move back to the lower band is in store.
The lower indicators, the Stochastic and MACD, are both bullish in line with the recent move higher but they looks set to easily become bearish should price move down from here.
The question I have now is does price make a higher low or one final low before lifting off? Well, we’ll just have to wait and see. Personally, I think one final low will be seen.
VIX WEEKLY CHART
The major support I am watching and expect to hold is the bullish double bottom with the trend at 11.52 which is denoted by the horizontal line.
The RSI now has a bullish divergence in place and if price to go down now and make one last low then that would likely be accompanied by a triple bullish divergence.
The Stochastic and MACD indicators have both just made a bullish crossover which breathes some life into the bulls.
Finally, I have added moving averages with time periods of 50 (blue) and 100 (red) and these are now in bullish position with the blue line above the red line.
So the countdown is now on. All systems are ready for go.