Relationship of the $VIX and S&P 500 $spx Analysis $spy #TA

Sep 5, 2015

Relationship of the VIX and S&P 500. Key areas to watch on are 44-37 range on the VIX and on the RSI 51. We will not see a sustained rally on the S&P500 until the Vix RSI fails through 51 while the Vix capped under 37 level. The market will need some time to work off the volatility surge if this Asian contagion is actually over. However the market should not be trusted as long as the VIX remains above 21 in the after math of the most recent dump last week.

There is no reason to rush in for discount longs as we can see when the VIX does finally fail you will have plenty of time to participate in the ensuing trend. For now caution is advised as long as the VIX and its RSI remain at extremes until set levels are breeched downside of the RSI reading. The market will be hard pressed to get through the range on the high side very easily after 9 months of distribution at ATH's.