VIX Still in Lock Down

The term World War III is appearing in headlines this morning.

The VIX for one, is unimpressed as yet. It spiked, reversed back below the daily SMA 200 and now is pulling back toward the SMA 50. By definition a significantly depressed VIX is generally an indicator of high risk vs. reward. But this morning’s headlines have not broken it upward from that condition.

vix

Indeed, the weekly chart shows the VIX on the floor. But what of that sub-floor? We’ve been watching both of these levels in NFTRH. If markets were to take the Iran conflict in stride and keep the VIX locked down in its current state, might the most obnoxious display of bull relief manifest from the situation? Might VIX be drubbed all the way to its 2017 low at 9?

vix

It’s too soon to tell about something like that. It sure does seem improbable. But by the pictures above it is also too soon be be counting the market out. Can you imagine the gall of a situation where we start a war and stocks celebrate to the high heavens? Probably not, but the VIX as of 11:19 AM US Eastern time on January 3rd is… in technical lock down. That’s a fact.

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