News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • 🇳🇿 Building Permits MoM (JUN) Actual: 3.8% Previous: -2.4% https://www.dailyfx.com/economic-calendar#2021-07-29
  • Heads Up:🇳🇿 Building Permits MoM (JUN) due at 22:45 GMT (15min) Previous: -2.8% https://www.dailyfx.com/economic-calendar#2021-07-29
  • Bitcoin Price to Boost Coinbase as Robinhood IPO Flops $BTCUSD has propelled higher this week. With crypto outlook sanguine again, $COIN has potential to outperform $HOOD following its weak trading debut. Link to Analysis - https://www.dailyfx.com/forex/market_alert/2021/07/29/bitcoin-price-to-boost-coinbase-coin-as-robinhood-ipo-hood-flops.html https://t.co/cR8w1neoT5
  • Robinhood given an enterprise value of $32 billion after shares priced at $38. Get your market update here:https://t.co/fybAmxrAdo https://t.co/XeUn7kAZ0Q
  • 🇰🇷 Business Confidence (JUL) Actual: 97 Previous: 98 https://www.dailyfx.com/economic-calendar#2021-07-29
  • Forex Update: As of 20:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.87% 🇨🇦CAD: 0.63% 🇨🇭CHF: 0.43% 🇯🇵JPY: 0.39% 🇪🇺EUR: 0.37% 🇦🇺AUD: 0.27% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/vH1UWZP3Gt
  • Robinhood closes its first session as a publicly listed company down just over 8% $HOOD https://t.co/4GOkrVfs1B
  • Heads Up:🇰🇷 Business Confidence (JUL) due at 21:00 GMT (15min) Previous: 98 https://www.dailyfx.com/economic-calendar#2021-07-29
  • Commodities Update: As of 20:00, these are your best and worst performers based on the London trading schedule: Silver: 2.33% Gold: 1.17% Oil - US Crude: -0.33% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/gkJwZQnj4N
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 92.22%, while traders in Wall Street are at opposite extremes with 75.65%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/NPtVj3FLsQ
S&P 500: Fear Rising, Breadth Sinking

S&P 500: Fear Rising, Breadth Sinking

Paul Robinson, Strategist

What’s inside:

  • VIX (‘fear barometer) spike unusual versus the relatively small decline in the S&P 500
  • Breadth becoming oversold, but not at an extreme yet
  • Watching VIX/breadth developments in conjunction with price behavior

The S&P 500 is thus far making good on the bearish weekly reversal bar from overhead resistance above 2100, at least to start out the week. Our first level of support penciled in was 2085, which proved to be little challenge in breaking yesterday.

The S&P is currently challenging the 2070/72 area, and if this should give way then minor support comes in around 2060/57, but there isn’t anything truly substantial to speak of until the S&P trades down into the 2040/25 zone.

The most obvious point of resistance at this time is the 2085 level (the ‘old support, new resistance-thing’).

SPX500 Daily/2-hr

S&P 500: Fear Rising, Breadth Sinking

During the past two days we have seen an unusually large spike in the VIX (‘fear barometer’) relative to the decline in the market. These spikes occur when options traders buy protection against adverse market movement. The VIX spiked 43% from Friday through Monday while the S&P 500 lost only 1.7%; unusual stuff. Clearly there is a repricing going on with where volatility ‘should be’ after a prolonged period of complacency.

Volume in VIX options yesterday ranked #3 all-time according to the exchange they trade on, the CBOE. Granted, VIX options haven’t been around for but a few years, but still when looking at the top 10 occurrences back to late 2013 this type of event has typically occurred not long before a bottom or a bounce at the least.

The percentage of stocks in the S&P 500 trading above the 10-day MA is at a 4-month low (+22%), but hasn’t become extremely oversold yet; this generally doesn’t occur until under 20% (closer to 10%).

SPX w/VIX and Breadth

S&P 500: Fear Rising, Breadth Sinking

What does this all mean? Not much yet. These are factors worth keeping an eye, though, in conjunction with support and resistance levels and how the market reacts to those levels. The market remains at risk of further downside in the near-term, but should we see positive developments at key support levels along with further extremes in the VIX and breadth, then we will be ready to react, whether that be in covering existing short positions and/or establishing long positons.

The ideal scenario from where we sit: Continued selling into the 2025/40 zone along with a higher VIX and deeply oversold breadth.

What characteristics do successful traders have in common? Find out in our guide, “Traits of Successful Traders.”

---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES