In the wake of the strong move of Yesterday, we briefly analyze both VIX and US Stock market.
On weekly chart, the VIX had a “13” countdown of DEMARK completed few weeks ago. We stress that in previous moves the 13 or “9” series had anticipated important moves upward or downward. (November 2019, March 2020, June 2020).
Having said that, the market Yesterday has touched the first resistance set at 39.
→ if the VIX will close this week (therefore on Friday) above this level, very likely a move toward 48 then 60 on the upside.
→ in this case the bear move on stock market could be very strong and fast.
Analyzing SP500 chart, we envisage a bearish “13” countdown completed last week. The market is now retracing as in most cases after a bear DEMARK series completion.
→ the main supports on the bull trend are 3,650 and the 3,600
→ our assumption is that the support will hold, unless the volatility will break on the upside
→ in case of breaking of the volatility on the upside, a move toward 3,200 will be likely
→ we recommend a cautious stance and to reduce long holdings on stock markets
→ last but not least, we stress that today and tomorrow can be crucial for determining the February’s trend on stock markets