The 30min chart of the VIX has been triggering a buy signal for most of the week as you can see from the green paint bars in the chart. However, the official buy signal was not triggered until today when price closed above the signal line. This is a short signal for the S&P. Since it's a 30min chart, it usually means at least a 20 point move that will occur within the next few days. You can see how accurate and forward looking this indicator can be by looking at the VIX sell signal confirmed early this week which signaled the large rally we've been engaged in all week. Now the VIX is signaling the stock market's rally is ending, or has ended, and will pullback 20+ points soon.
The wave count shows an impulsive rally that is incomplete. Wave ((4)) is most likely unfolding which means it's possible some boring price action may be ahead of us the rest of the week. I do expect a quick new high for wave ((5)) eventually, and that will be followed by a sharp decline. The VIX sell signal I mentioned above supports this. Depending on structure and magnitude of that decline, it will help confirm my long term bullish count, or if perhaps something much more bearish is unfolding since the Brexit vote.
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PLEASE NOTE: THIS IS AN ELLIOTT WAVE BLOG EXPRESSING AN OPINION AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. TRADE AT YOUR OWN RISK.
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