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Is this a VIX Top and a Market Bottom?

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Volatility plays a role in any market environment, but I always look to key areas of resistance on the VIX to help identify tradable bottoms on the S&P 500.  In my last article on June 1st, I suggested that the 18-19 resistance on the VIX could prove to be key.  Thus far, it has been.  The VIX has hit this resistance level with the S&P 500 also sitting almost squarely on trendline, price and moving average support.  If the S&P 500 were to lose these support levels, we could see the VIX push up to the 22-23 area, a much bigger level in my view.
 
Check out the confluence of support on the S&P 500:
 
$SPX 6.15.13

 As all of this support comes together on the S&P 500, take another look at the VIX:
 
VIX 6.15.13

An area of the market I follow closely to suggest whether a stock market rally (or decline) is sustainable or not is the semiconductor ($SOX) group.  The SOX had issues recently as daily momentum showed signs of slowing.  The MACD clearly printed lower lows while the index itself was moving to fresh highs.  Check this out:
 
SOX 6.15.13
 
While this chart may look ominous, I'm featuring a much more bullish SOX chart as my upcoming Chart of the Day.  One critical move there could begin the next leg higher in the S&P 500.  CLICK HERE for more details.
Tom Bowley
About the author: is the Chief Market Strategist of EarningsBeats.com, a company providing a research and educational platform for both investment professionals and individual investors. Tom writes a comprehensive Daily Market Report (DMR), providing guidance to EB.com members every day that the stock market is open. Tom has contributed technical expertise here at StockCharts.com since 2006 and has a fundamental background in public accounting as well, blending a unique skill set to approach the U.S. stock market. Learn More
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