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The SPX (cash S&P 500 hourly chart) made a new high Wednesday at 1169.84, and right at the open the VIX made new lows today at 16.17, before reversing to the upside to 17.40, where it has smacked into a 3-week resistance line.
If the equity market is turning down for a meaningful correction, then the VIX must close above the trendline -- and preferably above 17.70. Otherwise, provided today's low remains viable for a while, what we have is just a new low -- and the first coordinate in a new bottoming effort. ETF traders may want to watch the Barclays Bank iPath S&P 500 VIX Short Term Futures ETN (NYSE: VXX) and the S&P 500 Depository Receipts (AMEX: SPY).
Mike Paulenoff is author of www.MPTrader.com, a real-time diary of his technical analysis & trade alerts on ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international markets, plus key ETF component stocks in sectors like technology, mining, and banking. Sign up for a Free 15-day Trial!
