India VIX is pointing towards a very bearish picture for the market. After struggling to move above 25 for long time nearly five months it has moved above it and is not placed at 28. It has successfully moved above the resistance line indicating the strength of the bears and a clear picture that bulls are running for cover. You can see in the chart-1 above that it has broken above the resistance line. As per elliotte wave it appears that we might have compleated wave-2 and have just begun the wave-3 and generally wave-3 would be longest so we can see it moving further up and there by take the market down. So the obvious question would be to what levels would the VIX go? it has been given in the chart-2 indicated by an arrow, and it seems that we might see VIX moving towards 50 levels nearly double from current levels indicating that the market might make as good fall before any recovery comes. As wave-2 has take considerable time we might see wave-3 spliting into its components. So it appears as per VIX that bears would be having the last laugh atleast for the time being.

M.Sri Mahidar

Trend is friend.