TA spx 7.22.2022

S&P500 (SPX) Technical Analysis And VIX Indices – 7/22/2022

The market followed along the short-term uptrend line this week and filled most of the large gap at around the 4,016 level that was initially discussed at the end of June.

The market then stopped advancing after filling most of the large gap and broke the short-term uptrend line. Considering the FOMC meeting is coming up mid-next week, it’s a fair game to say the market could go either way next week.

VIX Related Indices

Percentile Rank (PR) of “VIX / VIX Related Index” ratios have all ended at around 50 to 60% on Friday 7/22/2022, except VIX/VVIX ratio which was at 91%.

PR of VIX and VIX Indices themselves also ended at around 50% on Friday, except for VVIX which was at 2%.

Looking back at historical data of these VIX and VIX Indices PR values, when they are at 50% PR,  it is possible for any of these values to jump to 80% PR or higher the next trading day.

Whereas it is less likely for these values to jump from 20% PR to 80% PR the next trading day.

In other words, these PR values are not low enough to indicate the market will continue its uptrend trajectory with high probability.

Since they are still close to 50% PR, even though the market rallied so much this week, indicates the market is still highly hedged and the market could still go either way in an instant.

In case you are interested, here is more information about why it’s a good idea to monitor these VIX indices.

VIX indices 7.22.2022

SPX Technical Analysis

Looking at the daily chart, the large gap formed back in early June is now mostly filled by the current uptrend.

It’s interesting to see once the gap was filled, the market stopped and turned around a little bit on Friday. This movement broke the short-term uptrend line drawn with the hourly chart (yellow uptrend line).

There is a small gap at around the 3,800 levels so I will be watching this closely in the coming days. Considering the FOMC meeting is next week, there is a fair chance that this gap could be filled next week.

The VIX data shown above also indicates this is a possibility.

On the other hand, the FOMC meeting could also act as a catalyst for the market to break through the mid-term downtrend line and move higher.

As I have mentioned before, Technical Analysis does not predict the future, it merely acts as a tool to provide actionable points in the future.

TA spx 7.22.2022

Daily Chart


TA SPX hourly chart 7.22.2022

Hourly Chart

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