VIX Sell Signal

I've been going back and forth over whether to post this as the big event tomorrow if the F_O_M_C meeting, but after talking to a few members, I think it's worth posting if for no other reason then educational purposes.

There's a VIX signal right now which suggests the market is a sell, here it is and how it works...

First you have the VIX with Bollinger Bands set to 20/20. There are 3 components, the first is the VIX closing outside of the BB's which happened Friday, the first day in the red square, the second day the VIX needs to close back inside the Bollinger Bands which happened yesterday and the third day (today), the VX has to post a higher close then yesterday, all 3 components have occurred an it rarely happens. Furthermore my custom DeMark influenced indicator is giving a VIX buy signal as of Friday, the start of the VIX signal. Additionally, the VIX is now around the same level as the late July decline that saw the market plunge by 17% and even more on an intraday basis, that was the last big decline we have seen in the market.

We did have another buy signal in the VIX earlier which would mean a sell signal in the market, but we didn't have the VIX signal then.

We also have a sell signal in the SPX on the same Demark indicator on a 2 day chart, that's a strong signal.

There have only been 2 signals in this timeframe, the first was the buy signal that ended the July decline mentioned above you can see to the left in green, now we have an even larger sell signal in a very thin market ramp.  These two taken together offer a pretty solid sell signal, however tomorrow will be focussed on the F_O_M_C announcement which certainly could disappoint the market.

Furthermore, these two areas in the SP-500 have striking similarities.

Both came off a nasty decline from a market top, both posted a low and then a new lower low that started a strong rally...

Both ran into the top's neckline as resistance and both were in leading negative daily divergences.

Thus far overnight the Euro is rounding over just as 3C had predicted before the close. Three and a half more hours before Europe opens...