UPDATE: 3:55 PM
The NDX RSI trend line was broken on the daily chart.
VIX to 21.98 intra-day high, up almost 40% this week.
VIX has broken out of its falling wedge. We should see some sort of backtest, which will establish a right shoulder in an inverse H&S; pattern, then a run up to 25+. Note that each target which is fulfilled on an IHS completes another, larger IHS — in a reverse waterfall of ever-increasing values.
I wrote about the same pattern last July, just prior to the market imploding [see: Do You Feel Lucky?]
But, an IH&S; pattern on VIX wouldn’t be worth much without a matching H&S; pattern on SPX, though, right? Here’s a little one worth watching:
Of course, little ones can turn into bigger ones…
Which can turn into really, really big ones…
The trend line from May 19, 2008 through May 2, 2011 and yesterday’s close. Note that it connects the wave 2 top in 2008 to what I believe is the wave 2 top in 2012 — kindred spirits, if you will. Thanks, again, to RS for pointing it out.
AUDUSD charts, relating to discussion below…