Almost There: January 6, 2011

VIX coiling... forming a Bat in a Bat nearing the apex of a falling wedge and the intersection of two major trend lines.  Consider what happened the last time VIX formed a multi-year falling wedge like this -- and they weren't anywhere near as steep.

Financials will lead the way.  They got us into this mess, and they'll get us right back...into a worse mess.   Unless S&P comes out and upgrades half of the EZ, XLF is going down.  This is as bearish a setup as I can imagine, with XLF perched in an unbelievably precarious position.

It just completed a Gartley pattern and a rising wedge right at the upper bound of a broadening descending wedge -- while also putting in Point C in either a Butterfly or Crab pattern.  Next stop is at least 10.05 -- a 25% drop from current prices.

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