The stock market indices' ability to recover reflected better from price action behavior which have been proven to show how bulls have retaken the price levels back to where it started. Both the Dow, USD (DXY) and the SP500 above their respective benchmarks @17000, @93.80 basis point and @2000 clearly shows the reflection of the Volatility Index as a useful trading gauge for trend direction.
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US DOLLAR INDEX & DOW JONES |
Although, the USD price recovery came late into the picture, both the DOW and SP500 had an excellent run staying above these marked levels turning into positive territory. Sentiments have similar reactions from positive fundamentals on jobless claims towards the middle of the European trading session.
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Volatility Index (VIX) |
A keen observation and price market behavior comparing the VIX and the two major indexes have shown the probable turning point where prices would turn. Noting that such increase in volatility on a rapid downward price direction can be seen as compared with the inverse of such direction higher with a considerable lower price volatility, as shown on the two images above.
Each point of reference on the VIX has to coincide with the projected price target of the indices. An example of which shows where the low of the DXY, DOW prices corresponds to the high of the Volatility Index after coming from the market consolidation (Trading range) and would eventually turn into a break-out then a directional trend in the making.
Each point of reference on the VIX has to coincide with the projected price target of the indices. An example of which shows where the low of the DXY, DOW prices corresponds to the high of the Volatility Index after coming from the market consolidation (Trading range) and would eventually turn into a break-out then a directional trend in the making.
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