VIX breaks back below 50-day moving average
S&P 500 Volatility Index (VIX) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
VIX finished the week -11.57% lower at 13.68 after losing $0.47 (-3.32%) today ahead of tomorrow's Presidents' Day market holiday. Today's close at 13.68 marks the lowest recorded closing price since January 23rd. Trading $0.42 higher after the open, S&P 500 VIX was unable to hold its gains as the bears took control ending the day below its opening price. Closing below Thursday's low at 14.00, the market confirmed its breakout through the previous session low after trading up to $0.62 below it intraday.
Daily Candlestick Chart (VIX as at Feb 14, 2020):
Friday's trading range has been $1.16 (8.22%), that's below the last trading month's daily average range of $1.62. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for VIX.
Prices are trading close to the key technical support level at 12.62 (S1). The stock index closed back below the 50-day moving average at 14.04. When this moving average was crossed below the last time on Wednesday, VIX actually gained 2.98% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
With prices trading close to this year's low at 11.75, downside momentum might speed up should the VIX break out to new lows for the year. Trading close to December's low at 11.71 we could see further downside momentum if potential sell stops at the level get activated.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 50" stand out. Its common bearish interpretation has been confirmed for S&P 500 VIX. Out of 145 times, VIX closed lower 55.86% of the time on the next trading day after the market condition occurred.