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Sunday, April 16, 2017 10:36:10 AM
Amateur Investors: Weekend Analysis
* April 15, 2017
The VIX looks like it will rally back to its longer term downward trend line in the upper teens. As we have seen since early 2016 the VIX has been making a series of lower highs and lower lows. This has allowed the S&P 500 to continue to make new all time highs the past year.
Naturally many investors probably expect the same thing to happen again as the VIX would stall out in the upper teens and then make another lower low in the single digits. Thus this would allow for the S&P 500 to make another new high at some point.
If the VIX rises into the upper teens and stalls out the S&P 500 probably would hold support at one of two levels. The first support area is around 2300 which is near its 100 Day Moving Average (blue line). Meanwhile the second support level would be along its upward trend line (purple line) which is approaching the 2275 area.
Meanwhile, if the market is going to make one more high after this current pullback, I would count the wave structure as shown below using the Dow. The current pullback would be Wave 4 of 5 which would be followed by a 5th Wave to complete the pattern with a target around 22,000 in the Dow. Keep in mind this would be the bullish scenario.
However if the VIX were to break above its downward trend line then that would lead to a larger correction as the VIX would rally into the lower to mid 20's. This would lead to a potential drop back to the S&P 500's 200 Day Moving Average (blue line) near 2230.
http://www.amateur-investors.com/AII_Weekend_AnalysisApril_15_17.htm
• DiscoverGold
Click on "In reply to", for Authors past commentaries
* April 15, 2017
The VIX looks like it will rally back to its longer term downward trend line in the upper teens. As we have seen since early 2016 the VIX has been making a series of lower highs and lower lows. This has allowed the S&P 500 to continue to make new all time highs the past year.
Naturally many investors probably expect the same thing to happen again as the VIX would stall out in the upper teens and then make another lower low in the single digits. Thus this would allow for the S&P 500 to make another new high at some point.
If the VIX rises into the upper teens and stalls out the S&P 500 probably would hold support at one of two levels. The first support area is around 2300 which is near its 100 Day Moving Average (blue line). Meanwhile the second support level would be along its upward trend line (purple line) which is approaching the 2275 area.
Meanwhile, if the market is going to make one more high after this current pullback, I would count the wave structure as shown below using the Dow. The current pullback would be Wave 4 of 5 which would be followed by a 5th Wave to complete the pattern with a target around 22,000 in the Dow. Keep in mind this would be the bullish scenario.
However if the VIX were to break above its downward trend line then that would lead to a larger correction as the VIX would rally into the lower to mid 20's. This would lead to a potential drop back to the S&P 500's 200 Day Moving Average (blue line) near 2230.
http://www.amateur-investors.com/AII_Weekend_AnalysisApril_15_17.htm
• DiscoverGold
Click on "In reply to", for Authors past commentaries
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Your Due Dilegence is a must!
• DiscoverGold
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