To close the trading day, lets take a quick look at the outlook for both the VIX and SP'500 - as based on extrapolated 1.6x Fib extensions. The Fib targets are based on the notion of a wave'1 down..and the 'best bear case' of wave'3 being 1.6x as strong as wave'1.
SP, daily, fib levels
VIX, daily, fib levels
VIX 35, and SP' 1170 ? Hmm, I suppose it could be argued that those two targets kinda match up, although perhaps we'd have VIX 37/40.. if we break into the sp'1100s.
Its very difficult to say of course, but...those are the levels to keep in mind for this August.
*Remember, we have more Bernanke tomorrow at 10am. I will be very tempted to re-short in the early morning if can get an early bounce to around 1365/70..and level out on the 15/60min smaller cycles.
Goodnight from London