I should have included an update on the $VIX (CBOE volatility index) in the video posted earlier today as it is definitely worth pointing out that the $VIX still at uptrend line support within a bullish falling wedge pattern with positive divergences to boot & a buy signal to come on a solid break above the wedge. Should that occur (wedge breakout followed by a sustained rally), with today’s FOMC announcement and/or the AAPL/AMZN/GOOGL earnings trio tomorrow after the close (which wouldn’t impact the $VIX until the open on Friday), that would help to support the case for swing/trend short positions on the indices and/or tech sector.
VIX daily Feb 1st
Bottom line: If the potential bullish breakout & rally scenario in the daily chart above were to materialize soon (i.e.- post-FOMC & 3x mega-earnings), that would equate with another leg down in the stock market. Likewise, a solid break & rally above & away from the key downtrend lines & 200-day moving averages on the stock indices & market-leading tech stocks would most likely result in a breakdown & drop below that uptrend line on the $VIX. Either way, we should have much better visibility as to which way the market wants to break from these key levels by next week.