Volatility – Quarterly Analysis
To find signals comparable to what the Volatility Index printed on March 31, we need to look back at the previous decade. That alone should raise attention. Let’s take a quick excursion there and draw the key analogies.
We opened this week’s series with oil analysis, arguably the most critical piece right now. However, that does not diminish the importance of market volatility—if anything, it amplifies it.
Now, let’s take a closer look.
CANDLES
Quarterly-Monthly
The signals printed by several volatility instruments on the quarterly scale on March 31 were unprecedented. VX, for example, formed a full Bullish Engulfing, reinforced by an 8/20 EMA bullish cross. Not only did the candle receive strong backing from multiple indicators, but it also closed as a technically robust formation on its own.
The monthly closures were primarily healthy bullish continuation candles, further strengthening the signal. There has been no comparable bullish setup before—this one is arguably the strongest on record.
Weekly-Daily
The first days of April started with a pullback. While the daily signals lost some support levels and the short-term stance turned bearish, the 3D and weekly frames still require strong confirmation of that initial intent. Their supports remain intact, and the first 2–3 days of the upcoming week will be decisive for setting the trend.
At this point, the short- to mid-term outlook is slightly bearish, very close to neutral. The long-term outlook remains firmly bullish.
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 no longer maintain the hypothesis that the VIX is closer to repeating the 2025 pattern. The recent monthly and quarterly signals from March suggest that a larger model may be unfolding, potentially aligning with the 2000 or 2008 analogs.
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 will increase in March. It could also move further up in April, though there is no certainty that it will end April higher than March.”
VIX closed March and Q1 with overwhelmingly bullish signals, arguably the strongest on record. This places VIX in a high-probability range for further increases, which could take a few quarters to unfold. Naturally, this puts the broader market into bear claws over a similar horizon.
VIX started April with a pullback, which is currently viewed as consolidation before the next, potentially more powerful, bullish wave drives the index higher.
At this stage, the short-term is slightly bearish, the mid-term is to be determined, and the long-term outlook remains firmly bullish.
