An Island Reversal In The VIX
Abigail Doolittle | Aug 31, 2012 08:40AM ET
This is an interesting development in the VIX and one that supports a round of sideways risk-off in the S&P.
Currently the VIX is trading in a confirmed Island Reversal pattern that remains confirmed above 17.56 for a target of 20.81 and a level that makes a lot of sense in matching the target of the small Bull Wedge outlined above.
Should the VIX remain above about 17.20 to keep its Island Reversal valid and despite an hourly gap at 15.50, it is very likely to move above 21 relatively soon as the S&P likely moves down toward 1329 on a Bear Wedge helped by a Diamond Top.
It seems worth, then, paying attention to an Island Reversal in the VIX.
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