Well, the uber bears are not going to like what I am about to write. Nor does this fit with the market breaking support and setting mew lows. I do not like the scenario either, but it fits what I think needs to happen.
Let's cover that first. I am a believer that to get to the end of the market it will need a form of capitulation we have not seen yet. I also think this capitulation will need to be externally caused and no one will be ready for it. A BOOM shut the markets down crash that the charts won't predict. I also think the bounce off of this crash will be just as abrupt.
Now, IF (I said if, all of this is IF) the lower dominant blue trend line gives way (the one that it has been beating on basically all year) and the VIX goes after the lower gap wave 4 may become larger or at least more extended in time than we're all expecting. RSI and STO are also sitting on key support lines and headed south. MACD it is not overbought.
The red channel may become the dominant player in this game. I am ignoring the bull cross of the ema 10 over the bb 20ma and the 50 ema that are bullish signs. I am ignoring the symmetrical triangle formation that might break out to cover the gap at 71. Look at the bear pennant. See it? It is there. If this was a chart of the SPX we'd be falling all over ourselves proclaiming bear pennant and planning the next short move. Well, maybe it is the right time to short the VIX. What does it look like to you? If I do a wave count it is possible that this is near the beginning of a 5th wave down or we're in an ABC corrective before the next 5 wave structure down. I can count 'em any way I like. It is MY CHART! Oh yeah, and I can go back and change the count anytime I like. LOL
Bottom line is that things are dire, but the oversold conditions and apparent "value" that exists in the market might possibly be a driver. Ther are a lot of greedy people out there with tons of $$ on the sidelines. If this awful projection comes to pass I'm looking at the SPX 842 retrace. No, I have not been sniffing glue again. I like to look at "what if" scenarios and I'm simply laying this one out there. Go look at my other VIX charts for some more notes. S135 and other stocktockers, I'd love your take on this.
Bottom line is the blue trend line. If that cracks....
Comments are welcomed.
Good luck today.