Some little thoughts for tomorrow...

Everyone and their brother, mother and grand-mother has been watching the "incredible, death defying VIX 2-Sigma buy signal". I would like to point out that this market has had a way of fooling many commonly accepted interpretations of signals such as Hindenburg, the VIX, Put/Call and Bullish percent signals. While it would be nice to see this a signal actually work for a change, the past VIX signals have been less than spectacular and stand a very good chance of continuing to be unpredictable or unreliable.

Additionally, I prefer to use log charts and on log charts all the bearish wedges have broken out to the downside as you can see from my SP500 chart posted earlier this week. As a recommendation, I would consider setting up charts in both Linear and Log Scaling for any index that you may be analysing as this will clue you into what the markets are seeing more as a whole. Some people prefer the linear charts some the Log charts. Its good to be aware of both.

I am posting these comments, as there are considerable cross winds in the markets here.

Here's a look at the wedge target os a rather sloppy pattern on the ES 24 hours globex futures contract. Keep in mind that this patten only appears on the futures contract...the cash market does not reflect this pattern at all. But sometimes this is somewhat useful to setup target ranges...

Here's a look at another pattern that is much better and also the rage lately with all the conflicted market action and internal dissonances...the Megaphone or expanding bearish wedge...