VIX visualization index falls below 65, and until it reaches the milestone near where the range percentage exceeds 75, be prepared for continued high-volatility conditions. Mr. Tetsuo Inoue

Yesterday I wrote about the “潮目,” but in the United States, California declared a state of emergency the day before, and in China there have been repeated reports that within this novel coronavirus there exist a relatively low-infectivity “S-type” and an extremely high-infectivity “L-type,” and that the “L-type” could become even more infectious as it evolves. As attached in Graph 3, funds flowed into bonds all at once, the stock market was in an opening rally that faded state, intraday trading saw risk-off CTAs and algos selling, and finally there was a little covering of those positions.

Still, the graphs for the “VIX Visualization Index” and the “range/volatility” have not yet formed a top or bottom, so I have attached them as items 1 and 2 for you to view; the “VIX Visualization Index” is below 65 (the current left-hand graph shows 68.8), and the “range/volatility” is above 75 (the left-hand graph shows 65.41). Until those major thresholds are reached, one must accept that the current high-volatility environment will continue. The “MD” “night ratio (night trading vs. daytime trading)” is also 121.4%, exceeding 100% again.

This unstable situation is symbolized by NYSE volume.
When the market has risen, market participants often say, “After this, trading value and volume will swell, and the market will have more volume.” That statement’s “lie” is something I have denied several times using past data, but the basis for that claim that “volume swelling is not a good sign” is exactly the current NYSE situation.
As repeatedly written, NYSE volume expands on month-end trading days due to rebalancing, so excluding 2/28, if you take the average volume since 2/21 for 9 trading days, it has been at 1.41 billion shares, well above the target 800 million, and last night it was exactly 1.4 billion shares.

Regarding the four technical charts, the Dow RSI, which I wrote yesterday as showing a bottoming-out, in that state suggests a near-bottom (in numeric terms), and the Nikkei’s RSI has fallen to 46.26% and is expected to fall further through next week. Also, the RSI totals for both indices tend to bottom out slightly earlier than the market bottom (as I noted before, about 3 to 7 days), and it is common for that total to bottom out before the actual indices. Therefore, even if the RSI total bottoms, the actual index bottom may lag behind, which is something to note, especially during large declines, as has happened in the past.

However, for the 3-disparity total (5-day moving average), both Dow and Nikkei have shown a bottoming and entered a bottoming phase yesterday. I will attach more graphs next week to convey the situation.

Inoue Tetsuo “Market Trends”