I note that the Dow broke below 15,000 and closed yesterday at 14,996. The chart below shows the S&P Composite, and the red line is the VIX or volatility index. As you can see, the VIX has risen to its highest level since July. Thus, the VIX is sensing some volatility to come over the next few months. As a rule, I usually ready myself for some market volatility when the VIX climbs from a dull period to over 20. We're not quite there yet.
I'm particularly interested to see whether the weakness in the Dow is followed today. Remember, the Dow is at the end of the third wave of the broadening formation, as shown below. To touch the upper trendline, the Dow would have to advance to 17,000 or possibly above. But it may not be necessary for the Dow to touch the upper trendline.
The chart below is the one ... Log in or subscribe to continue reading.
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