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Surge6 is likely to transition into Dip6
Yesterday we wrote: “For tracking purpose, we’ll continue to refer to this as the resumption of Surge6, and the dip from 7/15 to 7/19 was a minor dip. ...The reason is because we are tracking the definition of Dips by the impact $VIX $VXN have on prices. In this minor dip, $VIX $VXN have not made enough of a panic impact on prices yet. Therefore, the real Dip6 is still lurking.”
Today’s price actions and rise in volatility confirm that Dip6 is still lurking. While $SPX $NDX $RUT may have resumed Surge6 yesterday, the possibility is high that Surge6 is transitioning into Dip6, and that Dip6 can be a good-size dip. And Dip6 is likely to arrive after FOMC announcement next Wednesday 7/31.
Updates from market internals
Volatility: Yesterday we wrote: “almost every time $VIX has a sharp drop into the low zones, it ends up rising up sharply very soon afterwards. The same is true with $VXN.”
We saw this behavior repeating itself again today. $VIX $VXN dropped down sharply yesterday, and they both gapped up at open today. This is an important message to note.
$VIX $VXN are saying that...
The rest of this article covers:
Updates from market internals (more)
Support and resistance zones for $SPX $NDX $RUT
How to approach your trades
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