Despite volatility having bottomed a week ago, and after seeing it surge more than 20% since then, several key indicators are pointing to a very strong resistance at several key levels which means we could be seeing volatility retest their key support levels probably this week. Essentially we could be back to where we started in terms of volatility, however, markets have corrected close to 10% so far. This "last dip" in volatility could fuel perhaps the last market rally which could be good news for those who are still holding long positions and might be looking for an opportunity to sell even with losses cause after this last rally, the bear trend could regain full strength and we could see the S&P500 head to the 800 level.
As to what level the S&P500 might reach in this rally, in downtrends, volatility dips usually translate into rallies that are much less than those coming from volatility surges, so the only way to know this is to monitor it in real time. In addition to volatility, the S&P500 could have completed at the close of Friday a bottoming formation in 120 minute time bars that hinges on 2 intraday lows, both at the middle of trading on Wed and Friday.
As to what level the S&P500 might reach in this rally, in downtrends, volatility dips usually translate into rallies that are much less than those coming from volatility surges, so the only way to know this is to monitor it in real time. In addition to volatility, the S&P500 could have completed at the close of Friday a bottoming formation in 120 minute time bars that hinges on 2 intraday lows, both at the middle of trading on Wed and Friday.
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