VIX Breaks Out

The VIX has broken out from a falling wedge pattern, a typically very reliable pattern which targets the origin of the pattern. It will take a move below the November low to invalidate the breakout at this point. The breakout suggests stock market weakness in the coming weeks.

As of this post, the pre-market futures are making a strong showing with the SP futures up over 14 points. As long as the SP500 remains below 1198.62, the bearish triangle pattern will be the top count, and as long as it remains below 1207.38 the recent action should be viewed as an upward correction. However, if 1207.38 is taken out, then we would have to reconsider the bearish interpretations.