Stocks Could Turn When VIX Hits 30/31
Gregor Horvat | Feb 11, 2016 10:06AM ET
Traders, stock market remains in bearish mode with E-mini S&P 500 trading towards 1770/1790 while DAX can hit 8600. The main question regarding the overall direction on equities for the last few weeks is "if stocks are headed down for a collapse or is this only a big corrective move". Well, I decided to look on CBOE Volatility Index - know as index of fear, which means that when price is ticking higher fear is increasing so it has a negative correlation with stocks. On the daily chart of VIX I see price moving up since start of November with five waves so we need to keep in mind that upside can be limited as price should turn down after a completed red wave 5), with minimum three waves, but ideally we will see a new strong decline back to the lows as whole rally since 2015 can be a contra-trend. A turn down from 30/31 would be bullish for stock market.
VIX, Daily
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