We have spotted a monthly Bump and Run Reversal bottom in the VIX. The bump-and-run reversal bottom is a chart pattern that is a surprisingly good performer in both bull and bear markets. It has a very low break even failure rate and high average rise after the breakout. Discovered by Thomas Bulkowski in 1999. The current state of the pattern is the third lead-in printing above the supply line. What this tells us is that a reversal or a return to volatility is nearing.
Looking at fundamentals verse SPX500 is extremely wide. Eventually the market will revert after the central bank illusion.
How is the central bank illusion produced? Well it costs $180 billion per month to maintain the stagnating global economy.
Here is a shocker. FY’16 GDP estimates crash.
Summary: Volatility is coming back and it’s due to central bank distortion pushing up assets distorting fundamentals. There will always be a reversion and the further the way the more dramatic it will be.