23 Jul 2020 ● 06:07 AM
When will the US stock market top out? How about at VIX 16? Now you heard something new. Sentiment indicators like PCR work in the near term after a couple of negative divergences but if you are looking for something bigger then look for larger degree support and resistance. The long term chart of the CBOE Volatility index shows the broad range. During bull markets like the tech bubble and the 2010 highs in US equities the VIX bottomed and spiked from the level of near 16 shown with arrows on this quarterly chart. The entire tech bubble formed with readings between 16-50. Prepare for a new volatility regime. We are still at 23 so way lower to go to 16 before we get to a top of some relevance I think even from a trade perspective.