Above is the daily chart of Volatility Index (.VIX). With the consecutive large black candles last week, the Index inevitably sparked, reaching as high as 21.93.
Still it was resisted by the red down-trend line, and turned its direction after touching the line. This was what I have predicted on the thread on 8-July.
Now the index is more likely to fall back to the level of 15.5, which has been an extremely strong support to VIX from last Dec 2010 (although the index once broke down in April 2011, we could see its power from May to Jun).
Falling in VIX signals a consolidation of S&P500. This makes sense as it is time for it to take a rest after a week full of bad news. There aren't many important economic indicators revealed this week so the global stock markets are less likely to be influenced heavily by bad figures.
Once the index drops to 15.5, something gonna happen again, which should be at least after this week. So be prepared for next week's fight.
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