Overview: First, take a look at the S&P 500's action since last September. Note that it started its severe correction at that time.
In the past two weeks, many investors were happy with glee, thinking that a nice and safe Bull rally is in play ... after all, the S&P's January/March resistance line has been broken to the upside.
Sounds good, but there is more to the story ...
Since last September, the VIX has formed a huge triangle that is coming to a breakout point soon. On Monday, it had a slight breakout to the upside on a gap up move. But, yesterday was also the last day of the month and the last day of the Quarter, so some portfolio adjusting could have been in play.
Then yesterday, the VIX dropped back down into its triangle area. Sometime between now and the middle of April, the VIX will have its real breakout and the market will move in the opposite direction of the VIX's breakout.
Until then, the S&P 500 is in a non-confirmation upside condition, with a "Red Flag" that should be carefully watched by investors.
From StockTiming.com
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