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Here is an excerpt from our trading plan.
Surge4 is ending; Dip4 is starting
On Thursday evening 6/20 we wrote about the sharp intraday drops and rises in $VIX $VXN:
“This sharp drop is actually the first in a series of complex moves by $VIX $VXN to build an under-the-hood setup to rise back up. The move has started on the intraday charts for $VIX $VXN. We are likely going to see some unpredictable intraday swings by $VIX $VXN over the next few sessions. But basically, we are going to see them bounce around in these zones:
$VIX: 13.91 - 16.03
$VXN: 18.21 - 20.42
While $VIX $VXN do their funky dance moves up and down in these zones, $SPX $NDX $RUT are likely to keep rising. And then at some point next week, $VIX $VXN will be ready to spike as Surge4 ends and Dip4 starts for $SPX $NDX $RUT.”
That is pretty much what happened on Friday 6/21.
And at this point Surge4 is ending for $SPX $NDX $RUT. We should see Dip4 start Monday or Tuesday. So let’s take a look at market internals.
Volatility: The most important message from $VIX $VXN is this. The Up Trend that started on 12/26/18 for $SPX $NDX $RUT is still intact for now, but Surge4 of this Up Trend is ending, and Dip4 is starting.
On Monday or Tuesday, $VIX $VXN are likely to do one or two intraday swings, and then start to rise steadily up as Dip4 progresses. $VIX $VXN are likely to run into resistance in these zones:
The rest of this article covers:
$SPX $NDX $RUT support & resistance zones during Dip4
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