This week is a typical example of when Technical Analysis indicates something that should happen, and it doesn’t.
There were multiple events (FOMC meeting, GDP, earnings, etc) that have contributed to the large uptick this week.
VIX Related Indices
Percentile Rank (PR) of “VIX / VIX Related Index” ratios are all still at around 50 to 60%.
PR of VIX3M and VIX6M dropped below 40% on 7/28 Thursday, which indicates projected volatility for the mid and long-term are starting to calm down.
In case you are interested, here is more information about why it’s a good idea to monitor these VIX indices.
The VIX table for these calculations is now automated and available here.
S&P 500 Technical Analysis
SPX broke through the 50-day Moving Average and the mid-term downtrend line.
If the market continues to move up, the next key point to watch on the upside is the 200 days MA.
Considering how fast the market moved up and how far ahead and away it is from the uptrend line (red line), there should be a pullback happening relatively soon.
Especially so since this past week was packed with so many key events.
There is still a small gap at the 3,800 level so there is still a possibility for a pull back all the way down to this level.