I used to really love VIX as an indicator of future market moves.  For the past several years, however, central banks and their proxies have been using it as a tool, bashing it every time they wanted to goose stocks.

Still, there’s value in charting it, if for no other reason than to understand what games they’re up to — or, when they’ve lost control.

continued for members…The LT chart shows upside potential within the falling white channel (having topped the white midline) as well as the rising white and purple channels. Though I struggle to find a Fib pattern that’s very clear, there seems to be more upside potential.  I should point out, though, that the reversal down at 12.80 (an overthrow of a Bat Pattern) produced a bounce to the purple .618.

And, we should acknowledge that the latest spike didn’t make it past the flat white channel midline — though another wave higher would make for a perfect fit of the rising purple and falling white channels (at around 33.05.)

In short, VIX is no real help in forecasting where the upcoming Fed action will send stocks.  But, there’s a clear path higher — meaning there could easily be more disappointment ahead.