Watching the VIX Springboard Level this Week

Mar 29, 2016: 10:19 AM CST

What’s the “VIX Springboard Level” and why should we be watching it this week?

Simple – let’s take a look at the VIX (Volatility Index) Chart below and plan our trading week:

The VIX Level to watch this week is 13.75 – roughly the 14.00 index level – which is a key support shelf.

In late 2015 the VIX used this pivot point as a springboard to launch higher which corresponded with a drop (decline/retracement) in stock prices.

With the stock market completing a “Repeat Pattern” to October 2015, we’re back at the spot where stock prices may retrace (after a stellar rally) and the VIX could spring higher into April.

Simply compare the highlighted areas and the positive divergences with the support shelf near 14.00.

The VIX remained mute (level) through early 2015 but jumped to life with the mini-crash of August 2015.

Note how the index behaves this week and next at 14.00 and 15.00 ahead of another possible springboard rally up away from the pivot like we saw in the latter part of 2015.

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Corey Rosenbloom, CMT

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