{"id":7150,"date":"2017-11-22T07:30:23","date_gmt":"2017-11-22T12:30:23","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=7150"},"modified":"2017-11-22T07:30:23","modified_gmt":"2017-11-22T12:30:23","slug":"chalk-up-another-win-for-the-vix-buy-signal","status":"publish","type":"post","link":"https:\/\/stage.jeffclarktrader.com\/market-minute\/chalk-up-another-win-for-the-vix-buy-signal\/","title":{"rendered":"Chalk Up Another Win for the VIX Buy Signal"},"content":{"rendered":"

The Volatility Index (VIX) generated its seventh buy signal of the year last week. And, just like the previous six signals, this one marked the bottom of a decline phase and was followed by new all-time highs for the S&P 500.<\/p>\n

On Monday, I suggested that the combination of bullish seasonal trends this time of year \u2013 plus the new VIX buy signal \u2013 could push the S&P 500 to new highs<\/a> by the end of the week.<\/p>\n

But it only took until Tuesday.<\/p>\n

So, now what? Are stocks going to race immediately higher? Will we get a pause in the action? Or are we setting up for one of those sharp, one-day drops that show up out of nowhere?<\/p>\n

That\u2019s hard to say.<\/p>\n

Seasonal trends remain bullish through the end of the month. The S&P is trading above both its 9-day exponential moving average<\/a> and its 50-day moving average<\/a> \u2013 so the momentum is bullish as well.<\/p>\n

But a couple of my favorite technical indicators have climbed into overbought territory. This condition should limit the upside for the stock market.<\/p>\n

And, on at least a few occasions this year, it has led to some short-term downside action.<\/p>\n

Take a look at these charts of the McClellan Oscillators<\/a> for the NASDAQ and NYSE\u2026<\/p>\n

\"\"\/<\/p>\n

Both of these indicators help to measure overbought and oversold conditions. And they both closed above their upper Bollinger Bands<\/a> on Monday. They extended even farther above the bands yesterday. So, they\u2019re flashing a caution sign.<\/p>\n

That\u2019s not a reason to sell everything and head for the bunker. It\u2019s certainly not a reason to pile on a bunch of short sales. But it is reason enough to hold off on putting new money to work in the stock market.<\/p>\n

The upside is limited from here\u2026 at least until the McClellan Oscillators have worked off their overbought conditions.<\/p>\n

It doesn\u2019t matter whether that gets worked off by a sudden move lower in the S&P 500, or if the index just chops back and forth for a few days. The bottom line is there\u2019s no reason to rush in and panic buy stocks out of fear of missing the year-end rally.<\/p>\n

Traders will likely have a better chance to buy stocks in the days ahead.<\/p>\n

Best regards and good trading,<\/p>\n

<\/div>\n

Jeff Clark<\/p>\n

P.S.<\/strong> My \u201ccrystal ball\u201d VIX buy signal is just one of the many different techniques I use to spot short-term, high-upside trades for my Delta Report<\/em> subscribers.<\/p>\n

It\u2019s how I\u2019m able to hand them winners like 185% in 1 day on Paypal<\/strong>\u2026 200% in 29 days on Ford<\/strong>\u2026 and 343% in 11 days on Martha Stewart Living<\/strong> \u2013 week after week.<\/p>\n

To learn more about the Delta Report, <\/em>and perhaps the most formative trading day of my career, click here<\/a>.<\/p>\n

Reader Mailbag<\/strong>\u00a0<\/strong><\/h2>\n

In today\u2019s mailbag, we hear from some happy <\/em>Delta Report subscribers\u2026<\/em><\/p>\n

I commend you on your fine publication. I am subscribed to other publications that almost turned my option trading into a full-time career. Your service is, by far, the best advice, communicated regularly to let me in to the thinking behind your recommendations.<\/p>\n

Thanks for your work!<\/p>\n

\u2013 Don B.<\/strong><\/span><\/p>\n<\/blockquote>\n

I do appreciate your daily comments and suggestions. Very helpful in following through on my investment strategy.<\/p>\n

\u2013 David C.<\/strong><\/span><\/p>\n<\/blockquote>\n

And stand corrected on some \u201cterrific\u201d word choice\u2026<\/em><\/p>\n

Hello. In Friday\u2019s mailbag, you wrote:\u00a0\u201cFor me…\u00a0It\u2019s terrific motivation.\u201d I have always had a beef with people using \u201cterrific\u201d in a positive connotation.<\/p>\n

Yes, the dictionary has it as an informal usage to the positive, but that came about through the bastardization of the English language.\u00a0The root is\u00a0from Latin: terrere<\/em>, \u201cto frighten\u201d.<\/p>\n

Think of it this way; are you a terrorist because you had a terrific day?\u00a0Probably not.\u00a0 There are many other words that can be used to describe your delight in something or someone. Just saying.<\/p>\n

\u2013 Dana D.<\/strong><\/span><\/p>\n<\/blockquote>\n

As always, please send in your thoughts\u2026 and any other questions or suggestions\u2026 right here<\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

On Monday, I said the S&P would break 2600 by the end of the week. But it only took until Tuesday\u2026<\/p>\n","protected":false},"author":25,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[7],"newsletter-type":[],"ticker":[],"class_list":["post-7150","post","type-post","status-publish","format-standard","hentry","category-uncategorized","publication-market-minute","person-jeff-clark"],"acf":[],"ai_tts_audio_outdated":false,"ai_tts_legacy_post":false,"_links":{"self":[{"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/7150","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/25"}],"replies":[{"embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=7150"}],"version-history":[{"count":0,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/7150\/revisions"}],"wp:attachment":[{"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=7150"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=7150"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=7150"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=7150"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=7150"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=7150"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=7150"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}