The next leg down has the potential to kick off a third wave sharp decline at mutiple degrees of trend, If that were to unfold over the next few weeks it would be accompanied by a spike in volatility. The new pending trades that will cover both of those contingencies have shifted into "Pending" mode this afternoon. VIX - Buy Signal Pending on a close above 21.00 (currently 22.84): VIX Mar 22nd $25C (1.68-1.73) or VIX May 17th $50C (0.62-0.66), or both. SPY - Sell Signal Pending on a cklose below 400.00 (currently 399.77) SPY Mar 17th $390P (5.00-5.02) DJI - new trigger DJI - Sell Signal on a breakdown below this new, yet to be discussed, pattern recognition indicator. The trigger is a close below 33,600 (currently DJI is at 33183) which means that if the DJI closes here, or lower, we will have a confirmed Sell Signal. The attraction of this indicator to our arsenal is that it uses computations independent of our other indicators and patterns, i.e., an independently verification of a new leg down. Note in the shaded areas on the chart that past drops away from the trigger line have been steep and fast, ideal for trading, "next month," options. SPY - Breakdown below 400 - PENDING & Preliminary Sell Signal circled SPX - Preliminary Sell Signal circled VIX - Minimum expectation mid-30's with outlier potential > VIX 80 US 10 Year Yield & SPY This chart is from Feb 10th Premium Service update, comparing rising interest rates with falling SPY prices. I've updated through mid-day today as moments ago the high yield on the 2Y auction exploded higher in the Treasury's sale of $42 billion in 2Y paper. Rates on the 10Y are ticking higher now knocking on the door of 4.00%. Meanwhile, SPY has fallen from 408 to 400 and as shown above, is knocking on the door of a fresh Sell Signal.
