That Inverted Head and Shoulders Pattern has been gaining traction and attention over the last week or so. This morning S&P500 futures has painted the last shoulder.
This morning S&P500 futures came down to meet the early October shoulder and then spiked 20 pts to the upside. While the pattern is far from complete, I think we will get a better idea where the market is headed short term after todays close. A break under 2711 and I think that 2603 low will come rather quickly. However a strong rally today puts that neckline at 2824 into play, a break of which opens the door for a strong end of year rally.
For those looking for upside, a VIX over 20 is not your friend. It has been stubborn recently and is currently over that key 20 level. There will be no sustained rally for the market with the VIX over 20. A confirmation that the recent lows will hold into years end would be a smack-down of the VIX, much like we were accustomed to seeing in years past, With the VIX tumbling from the 20+ level this morning to under 15 and ultimately the 10-12 range.
Have a great Wednesday!