A Quick Note on the $VIX

The $VIX has broken out of the big bad wedge (blue) again. That should be sort of crashy for the markets, however: we’ve now poked out once, and broken out twice. There is a possibility that the more we mash through that structure, the more the market is signaling that it is done with that structure and is moving on to a new one (see the next chart below).


Unless we are facing a major market top here, perhaps we can just shorten the wedge and move on to a more traditional channel for a while, just like that (maybe it’s, “Oh, I guess we’re done with that”). We will have to see. If so, the rising green trend line should provide us with the rising $VIX environment we would expect if we are still heading toward intermediate 3 (and then the much larger correction for intermediate 4).

That said, it’s always a good idea to stay hedged somewhere somehow, just in case.


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