Thursday, June 19, 2008

VIX at resistance - Markets likely to bounce.

In May I did a piece on the VIX vs DJIA which has played out quite nicely. If we look back we can see that the VIX bounced on support of 17.5 and the DJIA hit resticance area at the same time - a good calculated place to change portfolio stance. We put a strategic plan in place to accumulate cheap stock according to the QUAD strategies that Pollux Technicals created in its earlier post.
According to the charts, we can see something is happening again with VIX at resistance while the Dow Jones Industrial average is at 1st support of the 1/2 QUAD strategy. This is the first point where one would buy stocks according to the 1/2 QUAD(more bearish). According to the 1/3 QUAD(more bullish) it would be the 2nd point where one would buy stock. All in all, a market bounce is likely here according to the VIX which has been a good indicator for this meandering market correction.

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