The most important aspect of this afternoon though, was the VIX weekly cycle finally moving to a positive MACD cycle.
VIX'60min
VIX, daily
VIX, weekly
Summary
Near term target is VIX 24, a classic gap fill - with sp'1300/1295 Tuesday morning?
Today's daily candle though is an extremely broad one, a bullish engulfing VIX candle no less. VIX candles are certainly less reliable - primarily due to regular bizarre spikes in both directions, so..even though we did close with a VERY bullish candle, the VIX level still fits within the overall outlook.
Only if the VIX breaks into the 26s, would I consider the market as ready to rollover again and start a major new multi-week downcycle.
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The VIX weekly cycle - the most important aspect of today.
Look at the MACD (black line)..which closed at 0.041 I've been waiting for this to go +cycle for thirteen weeks..and in the closing hour action it occurred.
Now look at the last time that little black line went +cycle....the VIX went from 17 to 49 within 4 weeks.
THAT is what I am suggesting...and I did note it in my weekend VIX posting anyway.
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Best guess - when taking into account the index cycles...
VIX maxes around 24/25 tomorrow...then falls back again...for a further 3-7 trading days.
Primary target remains sp'1350/60
Be clear about one thing...I do absolutely believe VIX is set to explode in the next few weeks - with SP' falling into the 1100s. I see today as a mere warning to the bulls that 'bailout talk' won't be enough to hold this market up.
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More later.