Replies to post #55818 on Options Wonderland

[dalcindo]

The BIG Drop - Attempt At A Technical Explanation ...


Last 03 MAR 2010, in light of the overall downtrending SPX, I posted the chart below with the following note:

"... Watch for this continuation wedge formation (BEARISH), ... etc."

I think that the wedge "did its job" in acting as a continuation pattern, holding on to the $SPX as far and as long as it did towards its apex.

The result is no surprise, considering that the price precipitated to its "normal" technical place. Downwards, that is - IMHO:

(NOTE - At this point, the chart reached a BEARISH trend as per 1/VIX relative to SPX)

$SPX & 1/$VIX - 36-Month, DAILY Chart:



- Dalcindo