Charts I’m Watching: Oct 14, 2014

VIX’s channel midline tag has been a long time coming.  Also, note the TL connecting the previous highs.

2014-10-14-VIX wkly 0600Obviously, these patterns don’t mandate a incipient reversal (rally in stocks); but, they’re a pretty strong hint.

Note, also, 10-yr notes could be topping here just above the .886 of the drop from May 2013.

2014-10-14-ZN daily 0600SPX overshot its SMA200 by a wide margin.  A backtest at this point would mean a 30-pt rally.  Note the completed Butterfly Pattern at the purple 1.272 and the TL of support from 6/12 and 8/7.  If bonds and USDJPY play ball, it could happen.

If it doesn’t, and a selling panic develops, I’m looking for 1834-1837.  And, of course, the larger scale 1.272 at 1823 is teed up nicely for a backtest.  Having paid scant attention to 1823 on the way up, a strong reversal there would be a nice way of emphasizing the “bullishness” of this drop.

2014-10-14-SPX daily 0600One strong argument for 1823 is CL, which is breaking down and appears headed for 64.38, with a potential bounce at 74.02.I will be out of the office tomorrow, Wednesday the 15th, on personal business but will try to post early in the morning.  GLTA.

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