Over the past six years or so, the VIX has been carving out an enormous saucer-shaped pattern. I’ve been dutifully tinting the price peaks (that is, the mini-panics) all along the way, and it forms a pretty interesting, if highly irregular, pattern.
As the VIX got pounded back into the sub-teens today, it occurred to me to compare the present activity to the period preceding the financial crisis. What I found was interesting. The chart below (click it for a much bigger version) shows 2003-2007 on the top and recent history on the bottom. You may notice a lot of similarities between the top and bottom, and I’ve drawn a red line at the top showing the equivalent of “right now”.
First published Sat Oct 1 for members of ElliottWaveTrader.net: This past week, I have been sent several “stories” that the dollar is going to absolutely “crash” on September 30th, which will supposedly cause metals to rally to the moon and beyond. And, as I have noted in my Trading Room oh so often, we have had so many such “stories” in the past, and we will no doubt have many more in the future. But, “stories” are not what drive the market, despite the common erroneous belief to the contrary, as the sky did not fall this past week, and neither did the dollar.
Then we had further “stories” of Deutsche Bank crashing and taking the world financial markets down with it. And, once again, all the “safe haven” gold addicts were harping about how gold was going to soar on this news. While more and more bad news was coming out about Deutsche Bank this past week, more and more were calling for not only the collapse of the company, but also a crash to the markets and a moon shot for gold.