Best Financial Markets Analysis Article VIX has broken out of its downtrend this morning. It's turn date was on Saturday, so there are no surprises here. Its next target is 65.62, the average target for the Orthodox Broadening Bottom formation.

You may recall that I have suggested watching the BKX, as it would be the leading index in this decline. You can see that the uptrend was broken last week and it is sitting at an important support level morning. Once the BKX has broken down, expect to see rapid downside acceleration in the banking index.

SPX is sitting on its uptrend line. Once broken, further support may be found at 1175.98 and 1162.19. I expect to see the bottom trendline of the broadening wedge formation broken in the next few days. The decline has nearly 3 weeks to go, but I don't expect it to waste any time. This formation suggests more than a 30% decline over the next three weeks. An alternate calculation suggests that we may be testing the 666 low at the end of wave 3.

Good luck and good trading!

Regards,

Tony

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Disclaimer: The content in this article is written for educational and informational purposes only. There is no offer or recommendation to buy or sell any security and no information contained here should be interpreted or construed as investment advice. Do you own due diligence as the information in this article is the opinion of Anthony M. Cherniawski and subject to change without notice.

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Comments

khen
18 Oct 11, 15:31

trend

What happened? We broke upside!

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