As noted yesterday,
only a lower low to the May low will officially kill the cyclical bull,
but today we tune in on something that is usually a negative for stocks
and could paint the current rebound as not simply another great buying
opportunity on the way to fresh highs.
A reader asked me to look at the status of the VIX in conjunction with the SPX:
There was an encouraging break downwards yesterday afternoon on SPX and ES, but it didn't last, and it wasn't the right shoulder on the possible IHS forming on both charts. Will we form that right shoulder? I like the setup but the stats for today and Friday are strongly bullish, and strongly bearish for Monday. For this right shoulder to form would require almost exactly the opposite of that. We'll see. Here's the setup on ES, with negative 60min RSI divergence having reached such heroic proportions that I would no longer regard this as viable reversal signal: