The VIX factor

This is yesterday’s VIX daily chart, marking a daily 13 (with a setup 3 as of today).  That means we have set a significant step to form a bottom but it can still be extended by timing counting to the setup 9 which covers all next week. The 90 level has with a probability of 90% marked the high at the same time.

This is one of the crucial steps for the end of this downleg – ideally as a 2nd step, as mentioned earlier, would be a price test of the 770-800 area for the SPX. The 3rd step is a weekly 13 count for the SPX – we are at a 9 count but the least is to complete the daily count. The 4th step, but not necessary part of that price test, is a capitulation mode high volume and a reversal price pattern. There is still a lot of hope out there, especially in the professional community of bank employees, wishing for a strong hand to make everything nice again (the good old times) – that is a signal that the real low is still far away also from a time perspective.

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~ by behindthematrix on October 28, 2008.

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