Market Direction and Stock Trends

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CBOE Volatility Index (VIX) - Temp Low in WATERFALL Event »» Weekly Summary Analysis
By: Marty Armstrong | November 21, 2020

CBOE VIX (US) closed today at 2370 and is trading up about 71% for the year from last year's settlement of 1378. Factually, this market has been rising for 2 months going into November reflecting that this has been only still a bullish reactionary trend. As we stand right now, this market has made a new low breaking beneath the previous month's low reaching thus far 2166 while it even trading beneath last month's low of 2403.

While the historical perspective of the of this market included a decline from the major high established back in 2008 moving into a major low in 2017, the market has bounced back for the last 3 years. The last Yearly Reversal to be elected was a Bearish at the close of 2019.

The perspective using the indicating ranges on the Daily level in the CBOE VIX (US), this market remains moderately bearish position at this time with the overhead resistance beginning at 2408 and support forming below at 2243. The market is trading closer to the resistance level at this time.

On the weekly level, the last important high was established the week of October 26th at 4116, which was up 3 weeks from the low made back during the week of October 5th. We have been generally trading down for the past 3 weeks, which has been a very dramatic move of 47.37%.

Immediately, this decline from the last high established the week of October 26th has been important closing sharply lower as well. Before, this recent rally exceeded the previous high of 3828 made back during the week of August 31st. That high was likewise part of a bullish trend making higher highs over the week of July 13th. This decline has been rather important penetrating the previous low formed at 2403 and closed beneath it settling at 2370 warning we may have a shift in trend unfolding. Right now, the market is below momentum on our weekly models casting a bearish cloud over the price action. Looking at this from a wider perspective, this market has been trading up for the past 2 weeks overall.

Interestingly, the CBOE VIX (US) has been in a bullish phase for the past 11 months since the low established back in November 2019.

Critical support still underlies this market at 2353 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Nevertheless, the market is trading below last month's low warning of weakness at this time.

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