Volatility Drop Could Cause Final Blow Off

מעודכן
The VIX is at times a perfect short term indicator.

The latest reversal pattern anticipating missing upside momentum in the VIX.

Global stockmarkets showing only little reaction to negative events wich occurs now three times in 5 tradingdays: US Hightechs selloff, Trumps Russia Probe.

If there is no momentum to the downside, stokmarkets upmove could show a parabolic pattern indicating the final blow off to the upside, followed by a short to medium term reversal to a countertrend downside move.
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If there might be no negative major event within 3-4 weeks US-DJIA could go parabolic up on the well known TSLA rally, caused by stop loss orders on short positions.
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VIX dropped 4,77% today.
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DJIA: Parabolic up - indicating a possible final blow off.

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SPX: Consilidation Pattern cup with handle confirmed.

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VIX drop to lower lows likely. Same time risks are rising that the next upmove could end in a reversal pattern for stockmarkets.

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Momentum to the downside is still there.

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Markets could go up (final blow off) and crash into to early short sellers strategie (like TSLA).
The risk also is rising to long traders. Any top could be the last one for a while. Stockmarket history also telling that the first down day wipes out the gains of "all" last trading days. The first sharp down day could wipe out gains of last 5-10 trading days (or more) in a few hours only.
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VIX review:

- BREXIT
- U.S. Election

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Long Term View since the 2015 China related "flash crash".

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VIX is showing markets lack to find direction:
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VIX: Bias unch.

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VIX: Heading to historic lows...


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VIX: Volatility drop should cause stockmarket blow off.

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FUNDAMENTAL VIEW: LONGTERM SEASONAL PATTERN vs. STOCKMARKETS HISTORY ON 5% DROPS

The S&P is doing something it hasn’t done since 1995, here’s what it could mean for stocks

QUOTE:
This year has been one of the quietest on record for the markets in terms of big and swift moves. Yet if history is an indication, volatility could soon rear its ugly head.

According to LPL Financial's Ryan Detrick, the CBOE Volatility Index, or VIX, has averaged a reading of 11.54 in 2017—its lowest ever. This as the S&P 500 Index hasn't seen a 5 percent pullback in over a year, its longest streak without such a decline in more than twenty years.

"This is only the sixth time since 1950 that the S&P 500 has made it at least a year without so much as a 5 percent correction, and marks the longest streak since 1995," Detrick explained.

Despite stocks hitting new record highs this week, the technician is skeptical that this trend will continue. Blue chip stocks "can go a little bit further without a 5 percent correction, maybe, but when you consider the calendar, we've got August and September, [there are] troublesome months coming up here," he toldCNBC's "Futures Now." last week.

SOURCE: cnbc.com/2017/07/16/the-sp-is-doing-something-it-hasnt-done-since-1995-heres-what-it-could-mean-for-stocks.html
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Monday, July 17th 2017: Further drop in the vix likely to come

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VIX ending on a multi year low:

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העסקה בוטלה באופן ידני
Trade was closed on friday at 9.4.
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Even trade is closed going to continue this discussion:

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VIX: New multi year low indicating/confirming final move to the up side.

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NASDAQ COMP - IMPRESSIVE SELL SIGNAL LIKELY

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VIX: REVERSAL OF FORMER DOWNTREND MIGHT OCCUR

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NEW TRADINGIDEA: VIX LONG

VIX: Lowest Levels since 1993
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PLEASE CLICK ON THE CHART ABOVE TO LOAD NEW BARS AND COMMENTS. THIS TRADINGIDEA IS FULLY CLOSED NOW.
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The VIX surged on August 10th 2017 44% (!).

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The VIX surged another 34%% on Thursday, August 17th 2017. It looks like a perfect set up for a short term sell off or flash crash.

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