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500 weekly is on support and the VIX index is up against falling resistance. The last time the 500 index found itself on this suppport line was 9/1. See the post for conditions at that time and look what was said in the very last sentence of the post, when investors were extremely bearish! (see post here)
Hi Chris,
Consistent with your charts above, Bollinger Bands also showed oversold conditions in charts of the major indices over the last couple of days. A rally today alleviates some of the fear/bearishness and oversold conditions in the short-term. Whether the sell-off then continues is anyone’s guess but as you indicate the big-picture suggests it could.
Thanks,
cjk
Gary… The big picture on rates/stocks suggested that stock prices were rich and we took positions to score on defense a few weeks ago. Interest rates remain very close to the top of the channel. It took months and months for patterns to form. Todays chart on the 500 and VIX is a reflection of the downside action and fear associated with the situation in Japan. Markets remain fluid and I am just attempting to share the every changing conditions in the market place.
The VIX chart reflects that a ton of investors have become scared, very quickly. What is Mr. Markets main job? To fool the majority, most of the time! The situation you bring up shakes out like this…in the big picture stocks were over extended a few weeks ago and still remain that way in the big picture…in the short-term, emotions have reached one of the higher levels we have seen in the past couple of years, reflected in the VIX and the decline of late has taken the 500 index down to a very important support line.
I attempt to find key reversal and exhaustion points as they unfold.
Hi Chris,
I’m confused – this paints a much different picture than this post: https://www.kimblechartingsolutions.com/2011/03/how-to-use-interest-rates-to-make-quality-big-picture-buy-and-sell-decisions/
Go long equities or short?