What I noticed this weekend is the current level of VIX support (or is it resistance?)
The top chart is daily bars with the 18-30 range that has held for almost a year. Those temporary pops to 35+ levels have been great trading opportunities and the recent retreat of the VIX from mid March to the present has surprised more than a few traders in the face of the deteriorating economy. Current technical indicators are oversold.
I stepped back a bit to look at weekly bars for 3.5 years and got a little different perspective. That 18 level that looked like support in the daily chart now looks like resistance in the weekly chart. Could the VIX really get back to 10? That would likely put the DOW at about 15,000 given current levels. Current weekly VIX technicals are also oversold, but looking back to mid 06 suggests they can get significantly more oversold without stretching historical precedent.
Finally, I stepped way back to look at monthly bars in TC format using my 3 linear regression template (30,11,3). Those who follow Worden Bros. know Don's premise is that we are in a secular bear market and current market strength is but a temporary rally reprise. The behavior of the VIX 03-07 clearly reflects the rise of the bull, while the current technicals on the monthly chart are neutral to overbought, with the LR30 suggesting a possible retracement back to 14 as a support level. The LR11, which has provided a support/resistance channel for the past 15 months, has now been penetrated solidly to the downside, increasing technical odds for the 14s.
This is a chart to keep an eye on, especially with respect to the 10/20 MAs as a developing downslope 10 MA would definitely encourage a bullish stance.