For the first time since we started this blog, and despite a 3% weekly fall for the Dow which we had pointed out in previous posts, we have recently become highly skeptical of markets correcting.
Despite a lot of renowned market strategists increasingly becoming more bearish in the light of this week´s fall, there are some visible signs which are pointing otherwise, like the collapse of volatility all across the board but lets take a look at some weekly readings:
VIX: -0.57%
VXO: -2.07%
VXN: -3.12%
QQV: -2.89%
For the first time, the two Nasdaq volatility indexes have broken critical support levels, which explains the Nasdaq Composite Index fall of just 1.69% for the week, in addition, the VXO has closed below the level which has always tended to rebound. The VIX is the only one holding on.
So unless markets open this Sunday down heavily and continue in the European and US session, then the correction might still be alive, if the open occurs with an up gap we could be seeing more buying ahead of the US open and by then it would be already too late. Nevertheless, its also probable that they might manage to keep markets stabilized within a trading range at least until the Fed meets next week.
Despite a lot of renowned market strategists increasingly becoming more bearish in the light of this week´s fall, there are some visible signs which are pointing otherwise, like the collapse of volatility all across the board but lets take a look at some weekly readings:
VIX: -0.57%
VXO: -2.07%
VXN: -3.12%
QQV: -2.89%
For the first time, the two Nasdaq volatility indexes have broken critical support levels, which explains the Nasdaq Composite Index fall of just 1.69% for the week, in addition, the VXO has closed below the level which has always tended to rebound. The VIX is the only one holding on.
So unless markets open this Sunday down heavily and continue in the European and US session, then the correction might still be alive, if the open occurs with an up gap we could be seeing more buying ahead of the US open and by then it would be already too late. Nevertheless, its also probable that they might manage to keep markets stabilized within a trading range at least until the Fed meets next week.
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