Above is the daily chart of Volatility Index (.VIX). Yesterday when S&P 500 Index moved vigorously, the volatility jumped and broke the red short-term down-trend line.
However, at the end, VIX dropped below the line again and closed in between the red and green lines.
After being unable to break out, the index is more likely to slump to lower levels. Support is at around 29.5.
At 29.5, there is another support: 50-day Simple Moving Average. Though historically this average was not a very strong support/resistant, we could expect no break-down at this level.
VIX is likely to remain at the range of 29.5-40.5. This means that the index would keep on fluctuating, perhaps around 1-1.5% movements.
As Hang Seng Index usually follows the previous US markets, HSI is likely to move 200-300 points a day as well. Dropping over 800 points like that on Monday is less likely to appear again this week. And may happen next week when VIX is breaking out the red down-trend line again.
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