Volatility – Weekly Analysis
Today, I noted that several indices faced a choice between an ugly close and an even uglier version of it. VX chose the latter.
In this weekly report, we examine how volatility is evolving, what it reveals about hidden market stress, and why it may be the key signal to watch before the broader market makes its next decisive move.
CANDLES
Daily/Weekly
The weekly Volatility panel closed with a powerful cluster of bullish signals. Among the most notable were a strong bullish Inside Up for VX, a close just 0.5 basis points above the prior week’s high, decided in the final seconds, and 100/200 WMA bullish crosses in both the U.S. VIX and VX. While some signals still require confirmation, their sheer abundance leaves very little room for VIX bears next week.
The daily frame remains less decisive. The first two instruments have technically confirmed bottoms, while the third and fourth are still working through the decision.
The 2D VX frame is especially important. The current candle will close on Monday, but the structure already bears a striking resemblance to the mid-January setup that formed right after the contract switch. If VX completes the candle as a solid green one, which would likely imply a red Monday for the broader market, the odds of a stronger volatility rally would increase further.
Overall, volatility instruments are positioned for a serious spike next week, and possibly beyond. Be prepared.
