Volatility – Weekly Analysis
Volatility Technical Analysis traditionally launches our Weekly Series this weekend and, as usual, sets the tone for the entire 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 us about.
CANDLES
Weekly
Daily
Today, volatility instruments closed the daily and weekly frames with strong bullish candles and recorded a few technical signals supporting a continued rally. For example, the US VIX recorded a 50/200 DMA golden cross a few days ago and today a 50/100 DMA golden cross. We have to roll back to March 2025 to see this scenario before.
At the same time, both the daily and weekly frames moved into overbought territory, which almost guarantees at least a short-term pullback early next week. We have to closely watch this move, as there is always a chance of a larger reversal.
We should also remember what was noted in the monthly report — that 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.
Overall, the indices and trends are bullish short- and mid-term until reversed.
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 February monthly:
“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.”
So far, the Volatility Index follows the forecast with higher odds to continue the move upward. There is a high chance of corrective consolidation early next week and a continued move higher. So far, the short-, mid-, and long-term odds remain bullish.
