You have two conflicting patterns, and really they are both playing off of each other. But one is bound to win over the other and that is likely to happen today.
On one hand you have a very strong declining trend line off of the September highs back on 9/1. However, that same resistance level is forming the neckline of an inverse head and shoulders pattern.
Now I know what will happen, some wiseguy will come around and say “You can’t do technical analysis on VIX”. To that I say, “If it is a chart, you can be sure I will be doing technical analysis on it.”
Personally, I’m not overly impressed by the IH&S pattern that is shown. It is legitimate, but the neckline is rather steep and not one that I typically play. So going forward, I am expecting that declining resistance to continue to hold and ultimately result in a bounce higher for the market.
So here is the pattern for you to consider and to decide for yourself, before the market ultimately does it anyway, which TA pattern will win the day?
