The VIX Is Key Right Now For The Stock Market

Ok gang welcome back, today we are off to the races in the stock indices and a lot of stocks in general. What is one of the things we are watching now, as this continues to take place? How will we know where to keep being long until? What are going to be some of the risks in that?

Well let’s talk about that for a minute. We are going to be focusing a lot now as we go forward here on the VIX. VIX is something we occasionally we bring into fold here for you, the reason being when we get to certain key level a lot things happen. Particularly we get down to the 12 area, between the 11, 12 area on the VIX this is often a major, this is a yearly chart here gang so you can see in the last couple years the 11 to 12 area is where we typically stop and then we find major corrections take place off these spikes up or where these major corrections take place in the market. Right now though we are below the 15 level as long as we stay below the 15 and keep pushing towards 12 we are going to continue to see rally’s in the stock market here, so we are going to keep watching for that.

Watch the VIX see if it continues to push down towards this 12 area, that’s going to go ahead and be very important. As it continues to do that the market can keep going up the ladder. Once we hit the 12 to 11 area though we have to start looking for major corrections to take place. Go back look at your favorite charts, look at the VIX, take a look and put up a VIX chart, S&P chart, DOW Jones Industrial chart and you will be able to see how those markets and many of your favorite stocks in those markets would stop and reverse.

In the mean time we have room to grow which means we can still keep going to the upside in these stock index futures as long as we keep pushing down in the 12 level in the VIX this market can keep going up. That’s going to be something we are going to watch once we get to that 12 and 11 area, then we got to watch out for the stock market to have a healthy pull back. We are going to keep watching that for you, keep you up to date on that.

Those are a couple key points that everybody should know, this is what’s going to help make the market. The focus of course was long side trading in the Live Trading Room and in part because of this kind of thing right here. The volatility is shrinking the market is able to go up. Keep watching this, study hard tonight. We look forward to talking to you guys in the live trading room tomorrow morning or in this weekend’s videos, take care everyone.

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