An extraordinary day across a number of markets yesterday, with the breaks through the bollinger bands on SPX and Vix looking particularly remarkable. I've been doing a bit of research this morning on similar setups in the past and they are a real rarity. On the Vix there was only one similar close in 2011 where the Vix both opened and closed under the daily bollinger bands. That was in April 2011 and it marked the 2011 low for Vix, though the 2011 high on equities was a week later. That candlestick on Vix should see a significant low there made yesterday or within the next day or two:
Cobra has made a similar observation about major accumulation days generally in his writeup last night so this high should not be treated as an immediate shorting opportunity:
The high yesterday was at 1395.95, and that was a couple of points short of my strong resistance trendline that would therefore be in the 1398-1400 area today. That should hold today I think, though I'm doubtful about it holding longer than that. If it breaks I'll be very sorry to lose it, as it is really the only decent muliti-month trendline I have on SPX since the October low. The move up since then has been a trendline desert compared to the big moves up in 2009/10 and 2010/11. The trendline setups on TRAN and RUT are much cleaner and clearer, which is interesting as they have both underperformed in recent weeks.
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