This week we’ll be focusing on the volatility index (VIX) as a key chart to watch. Generally, if the VIX pumps higher, we should see the market move to the downside. We typically see the VIX boost into the 2-3+ average true ranges (ATR) and then die down.
Based on the structure of the market, we could see prices start to grind higher to the upside if volatility subsides. The S&P 500 (ES) and Nasdaq (NQ) maintained structure last week, while the Dow Jones Industrial Average (YM) flushed to around 34,500.
Let VIX tell the story for the market this week. If volatility fades, the market could see a nice recovery higher. Be patient because in a bullish market, a few days of selling pressure can bring the strongest names like AAPL and GOOGL back to the buy zone.
Stay Focused!