Above is the daily chart of Volatility Index (.VIX). The previous sudden plunges in global stock markets due to the "concerns" led the index to previous high in mid 2010 at around 48.
Checking the historical data, we could easily find that this index only surged over 50 during financial crisis. Other than that, 50 is a critical level that always resists VIX.
Though the index was resisted at around 50 and fell, it was climbing again after reaching the upper line of Pitchfork. This is another evidence that the fork works quite well on charts, which we had proven on Hang Seng Index weekly chart.
The pitchfork is giving the next support at around 33 (sorry for the typo on the chart). Ultimate support by pitchfork is at around 30, which is gradually rising.
For the upside, of course it would be 50. Breaking out of this level would mean that there are some breaking news which greatly influences the stock markets.
At this moment, I guess if this really happens, it is more likely that the stock markets would slump hardly as bad news are just everywhere.
But currently, my view is that the index would fall into the fork again and rise slowly, instead of breaking the critical level all of a sudden. Stock markets would not be too stable (with maybe 300-point movement for HSI), and would not be too unstable either (at least there won't be over 600-point movement).
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