SPX:VIX Ratio At The Brink

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* N.B. See Friday’s UPDATE below…

Thursday, August 20th:

Note the aggressive selling on the SPX when the SPX:VIX ratio gets up to the 180 level. A drop and hold below the 100 major support level could spell big trouble for the SPX and the other Major U.S. Indices.

With the Momentum indicator in a downtrend on this timeframe, I wouldn’t be surprised to see a larger pullback occur in the equity markets. Watch the 2038 level on the SPX, as mentioned in my post of August 14th, for confirmation.

SPX:VIX Monthly Ratio Chart

As well, we should see a bearish moving average Death Cross form on the World Market Index, possibly as soon as tomorrow’s (Friday’s) close…see my post of August 19th for more information on this, as this (along with upcoming action in Chinese markets) could very well weigh heavily on U.S. markets.

World Market Index Daily chart

* UPDATE Friday, August 21st:

Failure to hold the 60.00 level on the SPX:VIX ratio chart could cause some panic selling in equities, as I mentioned in last year’s post of October 15th, 2014. Price closed just above 70.00 today (Friday), as shown on the following Monthly chart. The Momentum indicator is now sitting at the lowest levels seen in the past 20 years…an ominous sign of things to come.

SPX:VIX Monthly Ratio Chart

As far as the World Market Index is concerned, price fell further today, but I was a day early in the bearish moving average Death Cross formation — that will likely happen on Monday — forecasting another “sell” signal for world equity markets.

World Market Index Daily chart