VIX is breaking higher from a base
What is happening with the VIX ( the Cboe Volatility Index, or VIX, is a real-time market index that represents the market’s expectation of 30-day forward-looking volatility)? We are seeing the MONTHLY parabolic rise from August 2020 low 20.20. Does this mean that the stocks Indices uptrend is over? Should you be building the buying position…If we look at the monthly chart we can see a huge reversal month happened in October, and we can expect a continuation but not before a possible retest of the 50% of the October bullish engulfing candle around 32.
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As said the only thing that we can’t rule out is a violent price action heading into November US election uncertainty, so consolidation around 32 is not excluded and this is exactly the strong support zone for an upside continuation. At the moment a break and confirmation of a break below 30 will be a clear indicator that the upsiude reversal will be invalidated. We can see that clearly on the weekly chart below. Bounce off the 31.45-32 support zone could lead to an explosive upside move to 55-60 which is also a Fibonacci 50-61.8% retracement zone of a previous swing lower during the stock market upside reversal.
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We have used the combination of the top-down trading analysis to get these key levels explained in the charts.
