VIX closes within prior day's range after lackluster session
S&P 500 Volatility Index (VIX) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
VIX ended Thursday at 61.00 losing $2.95 (-4.61%). Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (VIX as at Mar 26, 2020):
Thursday's trading range has been $9.40 (14.31%), that's below the last trading month's daily average range of $14.35. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for VIX.
Prices are trading close to the key technical support level at 57.42 (S1). Prices are trading close to the key technical resistance level at 68.86 (R1). After having been unable to move lower than 58.03 in the prior session, the VIX found buyers again around the same price level today at 57.66. The last time this happened on March 19th, VIX actually lost -8.28% on the following trading day.
Although the index is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could speed up should prices move above the nearby swing high at 68.86 where further buy stops might get activated.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to previous low" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for S&P 500 VIX. Out of 610 times, VIX closed lower 55.74% of the time on the next trading day after the market condition occurred.