Volatility – Weekly Analysis
We open our weekly series with a focus on volatility—the signal beneath the noise.
In this report, we examine how volatility is evolving, what it reveals about underlying market stress, and why it may be the key driver of the next major move.
CANDLES
Daily/Weekly
After confirming bearish weekly reversals last week, volatility instruments continued lower and recorded solid bearish continuation candles, breaking below multiple support lines. Weekly odds remain strongly bearish.
The daily, however, showed technical weakness over the past two days despite strong rallies in the SPX index. Most likely, we should see attempts to bounce or even form a short-term bottom early next week.
Unless there is a sharp spike in volatility on Monday–Tuesday, the larger 15-day frames will print strong bearish combinations and extend the weekly bearish momentum to higher frames. In that case, we should expect further easing of volatility in April–May, possibly for a longer period.
15-Day
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.”
By mid-April, bears have decisively reversed those odds and extended the momentum to the 15D frame (barring a super spike on Monday–Tuesday). The shift has been swift, with volatility breaking down across key frames, allowing the market to stabilize and refocus on forward-looking drivers such as earnings.
