The VIX appears to have received its “get out of jail” card this morning and broken out. This has been quite a feat, so it is probable that there will be a short pullback before venturing higher. The nearest support is intermediate-term trend support at 34.56, although it could venture a bit lower. There is no evidence of support until it reaches Weekly Support at 27.20, but I would not expect it to venture that far. The 50% retracement at 30.99 may be the default secondary target.
Hourly mid-cycle support at 1225.11 did not hold the SPX decline, so we look for the next level of support, the lower trendline of the Broadening Wedge at 1210. This may provide the impetus for a bounce. Mid-cycle support (1225-1233) will then become resistance to that bounce. The bounce may be your last chance to go short, since a decline below the trendline raises the probability of a further decline below 1000 to 94%.
An alternate scenario might be a decline to intermediate-term Trend support at 1193.68, with a larger bounce to 1225-1233.
The target for this week’s decline appears to be the “lesser Broadening Wedge” target of 956.
XEU gapped below intermediate-term trend support at 136.82. It is now retesting it on the bounce. Once it drops back below, resistance at that level will solidify. The target for this decline is below the Head & Shoulders trendline at 132.00.
Hourly mid-cycle support at 1225.11 did not hold the SPX decline, so we look for the next level of support, the lower trendline of the Broadening Wedge at 1210. This may provide the impetus for a bounce. Mid-cycle support (1225-1233) will then become resistance to that bounce. The bounce may be your last chance to go short, since a decline below the trendline raises the probability of a further decline below 1000 to 94%.
An alternate scenario might be a decline to intermediate-term Trend support at 1193.68, with a larger bounce to 1225-1233.
The target for this week’s decline appears to be the “lesser Broadening Wedge” target of 956.
XEU gapped below intermediate-term trend support at 136.82. It is now retesting it on the bounce. Once it drops back below, resistance at that level will solidify. The target for this decline is below the Head & Shoulders trendline at 132.00.
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