A shot at higher on Tuesday

Well I was right, unfortunately, about the market going lower today with the Dow going lower by 47 points on a very broad based sell-off. But tonight I want to bring up another daily VIX chart because it put in an important pattern today. While the VIX gapped up to close 6.85% higher today, it put in a classic hanging man. The hanging man is a very high probability top predictor

I looked at the daily VIX chart all the way back to the end of 2007. In this period, I found eleven other instances of a hanging man occurring at or near the upper Bollinger band. In all eleven cases, the VIX was lower the next day. This would imply that we have a shot at (finally) getting some gains in the markets tomorrow.

In addition, all three futures are all actually not down right now at 1:10 AM EDT for a change. OK, the ES is down a tiny 0.02% and the NQ is actually up just a hair, but the point is that we're not seeing the 0.2% to 0.5% drops we've been getting lately. And significantly, they've been trending higher all evening.

Finally, the Dow once again found support in the 12,530 region for the third day in a row. This number also puts it right at the bottom of a rising regression trend channel going all the way back to last June, nearly a year. This point (the bottom of the channel, not this particular numeric value) has been tested four times since then, and it has held each time. Also, the Dow indicators are now as oversold as they were during those four declines that bottomed out at the lower RTC edge.

Given this, I have to think we have a shot at going higher tomorrow. I almost hate to say it, given all the gloom and doom going around lately, but at least some of the tea leaves seem to be suggesting that. We'll see.

Silver

Meanwhile, SLV broke below its 0.5 Fibonacci retracement level at 33.85 to close at 32.85 today. The next retracement level is at 30.47. If SLV can't manage to go higher tomorrow, it's headed for this level.