Disappointing day for bulls

The late afternoon sell off will have done little to calm bull's nerves. The prior two days had set things nicely for a Fed rally - enough to see a push to the 20-day MAs at least. But the concern now will be for further weakness off the open and a fresh push down. The volatility index hasn't indicated any wave of fear - but a failed Fed rally might be the cue to force weak hands to sell and put in place a stronger bottom.

Technicals of the VIX are at best neutral with the volatility index caught between 50-day and 200-day MAs. Whether such technical measures are relevant here is debatable by some, but it does suggest a measure of complacency compared to January through April.

Although there is far more fear now than there was during the 2005-2007 "Golden Years"

Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website

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