VIX: UVXY: Higher Volatility in September
VIX and UVXY have shown higher activity in September. Although, historically, we are still at very low levels of volatility, that may change approaching the election. VIX and UVXY are derivative measures of volatility that are moving, in general, in opposite direction to SPX500. However, during times of uncertainty, like upcoming election, VIX and UVXY may remain elevated while the markets are still moving higher. Choppy action in the market price movement is anticipated.
Technical levels: Based on Fibonacci extensions of the most recent move down, from $33.50 to $18.50, next potential upside targets for UVXY are $24.69 (38.2%), $26.43 (50%), and $28.17 (61.8%). These levels are largely dependent on the actual price movement of the SPX500 index, and can be used as a guideline only.
One hour chart shows that we are approaching 38.2% Fib level with RSI and MACD chart close to near-term overbought readings, with some negative divergence between the price and volume. This pattern may be indicative of a pull back or consolidation in VIX and a higher move up on SPX500 chart.
However, a four hour chart presented here, shows RSI and volume levels creeping higher then levels seen in July and August with more room to go toward considerably higher levels observed in June, when UVXY was trading at $45-$50. As it is difficult to place a price target on a derivative index, a trend is up, based on 4 hr MACD and RSI charts.
Technical levels: Based on Fibonacci extensions of the most recent move down, from $33.50 to $18.50, next potential upside targets for UVXY are $24.69 (38.2%), $26.43 (50%), and $28.17 (61.8%). These levels are largely dependent on the actual price movement of the SPX500 index, and can be used as a guideline only.
One hour chart shows that we are approaching 38.2% Fib level with RSI and MACD chart close to near-term overbought readings, with some negative divergence between the price and volume. This pattern may be indicative of a pull back or consolidation in VIX and a higher move up on SPX500 chart.
However, a four hour chart presented here, shows RSI and volume levels creeping higher then levels seen in July and August with more room to go toward considerably higher levels observed in June, when UVXY was trading at $45-$50. As it is difficult to place a price target on a derivative index, a trend is up, based on 4 hr MACD and RSI charts.