STOCK INDEXES ARE RETESTING INTRA-DAY SUPPORT LEVELS FORMED ON TUESDAY -- THE REBOUND IN THE VIX IS MUCH WEAKER THAN ON TUESDAY
MAJOR STOCK INDEXES ARE RETESTING TUESDAY'S INTRA-DAY LOWS... Stocks are falling sharply again today and are in the process of retesting intra-day support levels formed on Tuesday. That's an important test. The 10-minute bars in Chart 1 shows the Dow Industrials testing lows formed Tuesday between 24,200 and 24,100. Downside volume has been relatively light. Chart 2 shows the S&P 500 testing similar intra-day support near 2620. Chart 3 shows the Nasdaq trying to hold onto previous intra-day support near 6900. If the market is going to attempt to stabilize before the day is out, these are logical spots for that to happen. At the same time, volatility is rising. But not nearly as much as earlier in the week. That might be an encouraging sign.
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Chart 1
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Chart 2
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Chart 3
VIX HAS REGAINED ONLY HALF OF ITS EARLIER LOSS... The 10-minute bars in Chart 4 show the Volatility (VIX) Index gaining ground today while stocks are falling. It may be worth noting, however, that the VIX has regained only half of its drop from early Tuesday. And it's nowhere near the 40 level which was exceeded on Tuesday. The rise in the VIX doesn't appear to match the decline in the major stock indexes. And it appears to be losing upside momentum. That may lend some support to stock indexes as they retest their Tuesday intra-day lows. We'll probably know by day's end.
