| In our Monday morning update, here were our thoughts on the VIX coming into the week:
“Volatility continues to give us great clues (and teases) on the possible near-term direction of the market. The VIX closed above its 50-day moving average on Tuesday and cleared 20 every day afterwards. The close above 20 on Thursday was slightly bearish. However, the close back below 20 on Friday saved the bulls.
This is why we always say to wait for multiple closes above resistance, or below support levels, to confirm possible breakouts or breakdowns. We nailed the action in the VIX on August 2nd after the index closed above 20 for the first time in 2024. We said a move above 34 would cause panic selling and sure enough the August 5th high zoomed to 65.73.
The VIX remains elevated and will first need to clear 17.50 like we noted earlier, but more importantly, closes below 15 are likely needed to confirm another breakout across the board for the major indexes. On the flip side, a move above 24 and the September 6th peak at 23.76 likely gets 30-34 in focus while signaling a near-term market top.”
The third-quarter earnings season gets underway on Friday with the Financial sector getting the party started. BlackRock (BLK), JPMorgan Chase (JPM) and Wells Fargo (WFC) are set to announce numbers ahead of the opening bell.
While their numbers will be important, Tech earnings into month end will likely establish the next major trend for the market. We cover key support and resistance levels twice a week so we are prepared either way for a short-term market pullback, or a return run to record highs.
This month will also provide us with some tremendous trading opportunities so stay locked-and-loaded for when we take action. We are having an incredible year and we are looking forward to the last trading quarter for 2024. |
