Both the VIX and volatility ETFs like UVXY rose to highs this week almost identical to those reached in mid-December, yet the damage on the indices was far, far worse. I think this is a serious divergence worth noting.
Much of the December rise was hedging going into the FOMC meeting as well. But there was real damage done this week, but as drips, not impulsive breakdowns.
If this decline fails, then let's look at what happened the last time one of these failed -- we rallied to the 1.618 fib extension of the drop. A similar reversal from here would target an astounding 2182 SPX, right at resistance from a trendline from the highs in mid-2015 (the year).
The weekly and daily Bollinger Bands should head upwards as well, like they did on the reversal off the 1871 low, only this time we are close enough actually to reach them.
And get our true top, with bad breadth and Hindenburg Omens and stupid blow-off moves on specific tickers. It's going to be just grand.
|SPX case for 2182 top|
Yeah, I know it seems crazy after a week like this. We'll know soon enough.
GLTA, have a good weekend.