Below is what we discussed on Tuesday afternoon, as the VIX was heading for a test of its 7-month support plateau between 11.82 and 11.53.
As of this moment, with the June 23 low at 11.93 still intact, and with the VIX trading up to 13.40 as we speak, it would appear that Tuesday's test was successful-- that the VIX may have orchestrated a meaningful-upside reversal.
That said, to really get any upside traction, the VIX must continue still higher, and climb above both its moderately down-sloping 200-Day EMA at 14.56 and its prior rally peaks at 15.74 and 16.36.
Bottom Line: For the time being the cash VIX remains betwixt and between, but biased to the upside after Tuesday’s successful probe of important support. MJP 6/25/15
The cash VIX digs into key support starting at 12.00, down to 11.50, which must contain the weakness to avert the potential for a VIX washout, which by definition also should mean that the SPX is possibly blowing off to the upside in a buy-panic heading into the end of the first half of 2015 (Q2 ends one week from today).
Remember that phrase "performance anxiety?"
Well, if the VIX presses beneath 11.50, investors and position traders who are underperforming so far in 2015 may well have to hold their noses and take the dive into an all-time new-high equity market.
The next few days should be very telling indeed. MJP 6/23/15