VIX futures in particular have drawn a pattern that is especially dangerous for the broader markets, and which I think should be respected, a right-angled ascending triangle with a possible target up around 38. This is a very big deal!
|Finviz VIX futures daily|
If we reach this chart target on VIX futures, than it is safe to say that the 1867 SPX low will not hold, and neither will expected support at 1820. Rather, I think we could go as low as 1740 SPX this week on this kind of surge, triggered with crash-like moves on tomorrow's early morning data releases.
A low of 1740 would be an extremely ominous event here. First, it would mean that it is highly unlikely that we regain the 1900 level on the SPX; recent dip buyers would be stranded with losses, which would become more severe as the new Bear continues.
Second, 1740 SPX would become a neckline for a vicious head-and-shoulders pattern, one that would drop us to the 1346 SPX level as early as the first week of October.
The VIX chart is screaming danger for the short-term. Do be careful.