Just when I was about to lose faith in the ability of investors to recognize bad news when they saw it, something very rare happened yesterday.
VIX, which has been beaten down most every day since Mnuchin convened the Plunge Protection Team in December, suddenly popped up above its 200-DMA.
The futures executed a 51-pt reversal before someone realized how ugly things were getting and pushed the EMERGENCY button. ES climbed back above the SMA10 just before the close, and is back above it now. But, it’s still well below our sell signal — the .786 Fib at 2812.13.
Incidents such as this accentuate the cracks in the technical picture which are becoming more and more apparent — even to the bulls.
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