Volatility – Monthly Overview
Volatility Technical Analysis launches our Monthly Series. Using a disciplined blend of technical analytics, candlestick evaluation, Elliott Wave methodology, and classical chart patterns, this series is designed to isolate the signals that matter most and anticipate the shifts that shape market direction. Let’s see what these signals are telling us — and what they may be warning about.
CANDLES
Monthly – VIX Instruments
VIX – All Candles
Today, volatility instruments closed the 2M frame with a very concerning signal: all but VIXY formed Bullish Engulfing patterns. The read suggests we should expect at least 1–2 months of elevated market volatility. VIXY formed a Thrusting Line, which is generally a bearish continuation pattern; however, the technicals point to at least an attempt at bullish confirmation before potentially handing control back to the bears.
The monthly chart for US VIX confirmed a bullish reversal on the monthly frame — likely the first time such a pattern has appeared. The other VIX instruments signal a higher probability of at least one more month of elevated volatility.
The weekly candles continued to follow the bullish trend. The daily returned to a bullish posture after Thursday’s false bearish breakdown.
Weekly 8/20 EMA
On February 12, I discussed the 8/20 EMA bullish cross and the potential follow-up patterns — you can review it here: https://investingangles.com/9fhl
At this point, I continue to maintain the hypothesis that the VIX is closer to repeating the 2025 pattern in a time-compressed version.
SUMMARY
From the January monthly:
“Overall, the volatility candle landscape suggests that February, or at least part of it, could be quite volatile. The technical backdrop supports the hypothesis of higher volatility prices. A clear and strong bearish reversal, with confirmation, would be required to change this stance.”
After February, the Volatility Index has increased the bullish odds and expanded them to the monthly and 2M scale. There is a high probability that volatility increases in March. It could also move further up in April, though there is no certainty that it will end April higher than March.
A decisive bearish reversal signal in the weekly candles, supported by technicals, is required to flip the trend. So far, the short-, mid-, and long-term odds remain bullish.
