More Room to Run?
By Paul Cherney
After the VIX (market volatility index) has hit 50, the average gain for the S&P 500 is 10.9% and the average length of time that it rises after VIX 50 readings is 16 trade days. The 16th trade day from Wednesday, July 24, would be Aug. 15; a 10.9% gain from the July 24 close would equate to 935 in the S&P 500.
Volatility should continue to plague intraday action.
Either Wednesday's price action was a background positive, or some of the "big money" decided to throw its weight around in a thinly traded market (probably a little of both).
The Nasdaq has thick and well-defined resistance in the 1288-1300 area. The next layer of resistance is 1312-1354. Immediate support is now 1264-1255.
The S&P 500's resistance becomes thick and well-defined (strong) in the 885-896 area. Immediate S&P 500 support is now 868-859.
Cherney is chief market analyst for Standard & Poor's