No, not the market. We’re talking about VIX – the traffic cop that tells the algos which way to go.  Yesterday, it went as close as it could to breaking down below a key channel bottom – this after a very visible breakdown of the rising white channel on Monday.

What does it matter?It easily pushed SPX up above its rising wedge to new all-time highs. More importantly, it threatens to break SPX out of its rising yellow channel……which dates back to the depths of the GFC.  Because 12.2% per year isn’t enough, I guess.continued for members…

I don’t want to believe SPX is breaking out of the yellow channel.  It seems ridiculous to me. In fact, I still suspect that this exercise is about ensuring that the backtest of the rising SMA200 occurs at a higher low – for appearances sake.

Members will recall we’ve been here before (the yellow arrows below), most notably in April 2019 when SPX has having difficulty holding its 2.24 Fib extension at 2703 (VIX broke down below the initial purple TL) and the end of 2019 when SPX was running into its 2.618 (VIX’s newly minted red TL broke down over and over and over.) The other important factors are pitching in at the moment to support stocks. CL has reversed yesterday’s nasty plunge (even while RB has quietly shed 7.4% so far.) And, USDJPY has yet to show signs of breaking down.