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Wednesday, November 11, 2009

Freaky VIX Charts

Let me show you something cool. I was charting the VIX, and as I am wont to do, apply wave counts to it. Don't pay no mind to the wave degree, I had to put something on there just to show what I am trying to convey. I really don't look for specific counts on the VIX but I do look for valid patterns and structures. And what we have recently that stands out is an expanding triangle.

It would figure because if it was an E wave, we all were setting up for the move in opposite direction and figuring VIX was going up. But E waves fool. And I took the bait. And being an E wave, it turned hard on us.

Now here is the daily:

Now check out this weekly:
Now check this out: Its the VIX from earlier in the decade. Spooky similar huh? It portends that we have some VIX down slogging coming. Which would be consistent with a the markets continuing to churn sideways/higher over the next whatever.

I don't think it will churn as long as it did in 2003-2004 as I maintain this is not 2004. That was a cycle b wave. This is supposed to be a smaller primary wave which means the perfect Fib time of retrace is about the second week of January 2010.

The similar patterns suggest that "fear" subsides in basically the same way.

The price action on the VIX makes it seem like the VIX is fighting itself from dropping to the next trading range lower. But if the expanding triangle is correct, and indeed the pattern, then we should be seeing that move come soon. A break into the teens and then 23 becomes solid resistance for a while.

Sound impossible? I dunno, I'm just reporting what I see based on valid patterns. Each person must make due diligence.
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