Volatility Contraction:
As the VIX trades at depressed levels (this Tuesday recorded a bullish harami candle, and Monday filled in a gap from the 11/27 session), albeit an area where it seems to floor at for over a year now, some stocks have suffered. Below is the chart of VIRT, which has now been nearly chopped in half from its most recent 52 week highs. The chart seems to be stabilizing at the 16 number for the last thirteen weeks, but the fact that it is not lifting off that weighted down area for so long is a bit concerning. Two of the last four weeks have recorded doji candles, which often indicate a tiring in the prevailing trend. But PRICE action needs to confirm a downtrend could be concluding, and that would start with a move above 17.50. On its daily chart both of its 50 and 200 day SMAs are downward sloping, and it is having issues with 50 day SMA resistance, a line that it has been below almost all of 2019. Ball is in the bulls court, to declare a new trend. Until then play cautiously, as we know trends are more likely to persist than reverse.