VIX just reached 13.84, just a smidge away from our 13.93 target dating back to several weeks ago.  From China: It’s Not Me, It’s You:

VIX jumped up and tagged its SMA200. For those still sitting with a long position at 9.33, this is the easy money — a second chance for those who wished they’d sold last week. For diehard bears, the most likely upside target is 13.93 (ideally Wednesday, Jan 17) with a reach target of 16.13.

continued for members…

As this is occurring during the latest ES channel backtest, there’s a good chance this is as good as it will get.  It’s nearly a 50% (unleveraged) gain from 9.33, so I’m tempted to take the profit.

If ES drops through the top of the red channel from which it broke out on Jan 22, however, we have a shot at backtesting the SMA10 around 2833 – the first such tag since Jan 2.

If ES doesn’t recover by tomorrow’s open, then VIX might get a crack at 16.13 — which would invite another look at shorting.Stay tuned.

UPDATE:  Jan 30 16:00

Needless to say, ES didn’t recover overnight.  VIX opened up at 13.93 and never looked back.  We had a reversal at the purple .786 at 15.41, though it didn’t really produce much of a drop.  It tested the Dec 1 highs and managed to close above them.

VIX is tough to pin down, given its proclivity for head fakes.  But, unless we get a miraculous pop in ES overnight, it’s quite likely to reach 16.13-16.29.  For those who don’t mind taking a flyer, that’s another 10% above today’s close.  With an FOMC announcement due tomorrow, currency pairs still on the move, and oil and gas prices dropping like a rock, I like the odds.