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The VIX has formed a bullish falling wedge pattern with positive divergence on the MACD momentum indicator<\/a>. This pattern most often resolves with a breakout to the upside. If that happens here, then the VIX could run up towards the 19 level. And a rising VIX most often occurs with a falling stock market.<\/p>\n The last time the VIX displayed a similar pattern was in late May last year. That led to a very fast, 100-point decline in the S&P 500 in June.<\/p>\n The S&P 500 closed yesterday more than 6% above its 50-day moving average<\/a>. The index rarely strays more than 5% away from the line before reversing course and heading back.<\/p>\n So, the market is certainly ripe for a pullback. The question is “When will the pullback start?”<\/p>\n As I’ve written<\/a> repeatedly, we can’t get too bearish until the S&P closes below its 9-day exponential moving average (EMA)<\/a> – now at 2775.<\/p>\n But, with the chart of the VIX on the verge of breaking its falling wedge pattern to the upside, I suspect the pullback may start as soon as today.<\/p>\n Best regards and good trading,<\/p>\n Jeff Clark<\/p>\n Today, an Delta Report<\/em> subscriber reflects on Jeff’s Open Line Q&A, and lends their insights…<\/p>\n I enjoyed your webinar. It adds a lot to experience you “face-to-face.” <\/p>\n I’ve used short uncovered calls on trades when conditions were opposite of those you use uncovered puts, but I haven’t seen you mention that possibility. If the stock is in a downtrend and the current move looks exhausted to the upside, that’s the setup.<\/p>\n I’m ok, worst case, ending up short the shares. Uncovered puts are subject to surprise melt-downs which in general are nastier than melt-ups, yes?<\/p>\n![](\"https:\/\/casey-assets.s3.amazonaws.com\/images\/misc\/jeff-clark-signature.png\")
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