Watch The VIX For Clues

This is a difficult market to analyze because this week’s close gave fuel to both cases in my opinion. The bulls can argue that the way we rebounded off the lows on Friday is bullish, while the bears can say that this is the start of a larger decline. Next week will likely cloud the picture even more with a holiday shortened week and light volume.
The VIX shot out of a giant wedge on Friday and then closed the gap on the 60 minute chart. So far that is normal when you see that it was rejected at it’s first attempt to break through resistance. It will be critical that this finds supports and launches higher if the bears want to see further gains. If we fall back into the base then we’re likely to see a bullish to flat bias next week.