IMPORTANT NOTE FROM TIM: Not to put too fine a point on it, a technician at our hosting firm thought it would be a fine idea to try to optimize our site by changing some network settings. Well, it sped the site up considerably, but also caused some instability. If the site seems shaky at times this morning………….it’s not you, it’s us. Rest assured we’ll get this straightened out, and soon thereafter I’ll hunting down this young chap to strangle him. Thank you.
The next hurdle for the SPX:VIX ratio is 80.00, as shown on the following daily ratio chart.
As I mentioned in my post of March 12, 2750 was an important level for the SPX. It was where its counterpart, the S&P E-mini Futures Index broke below the bottom of a long-term uptrending Andrew’s Pitchfork channel (taken from the 2009 low to 2020’s high) and was trading at 2441.00 that day. Such a technical break usually signals that a new bearish trend would form. On March 23, the SPX hit a new low of 2191.86 and reversed the next day.
The SPX closed back above 2750 on April 9 and remains above as of Tuesday’s close at 2846.06.
For short-term clues on the where the SPX may be headed, the important support and resistance levels are identified on the SPX:VIX ratio. As I mentioned above, if this ratio can reclaim the 80.00 level, its next target would be 100.00…and we’d see the SPX continue to rally under this scenario.
Conversely, should the SPX:VIX ratio break and hold below 60.00 once again, then we’ll the SPX plunge below 2750 and possibly make a new low…below that made on March 23.
