After The Bell-Mid-Day Prepare for Increased Volatility Jan 18th

Let me share with you a truth about the markets-Low volatility preceds high volatility. When looking for points/profits-sometimes you have to start with facts that you know, then try to fill in the blanks.

What we know is the market has been struggling higher amidst low volatility and increasing bullish sentiment.

Looking at the XIV etf which moves opposite the VIX, we see a 5 day struggle to move higher. The %B indicator, an indicator I use to look for divergence from the BBands, is showing lower highs.

The VXX is the old formula. We see the same thing as the XIV, 5 days unable to move lower and a divergence in %B indicator.

TVIX same pattern, 5 day support with %B divergence.

Conclusion: As noted last week, I believe Semi earnings will kick off the start of volatility either by missing earnings or bringing about the final exuberant exhausting high because they blow away numbers. (The 1st scenario is more likely)

Either way, we are averaging into TVIX for the ride higher that's about to begin.

Tim Kathlina