S&P 500 - Top in place?

The break back below the S/H/S neckline has weakened the possible bottomformation considerably. If the decline becomes much deeper, which the MACD indicator indicates it will, then the Bulls will have to fold and sell out, adding downside pressure.
A break below 1,114 would be the next support to take out.

Looking at the VIX-Index we saw a break below the lower Bollinger Band in early september. A break below the lower Bollinger Band is negative for stocks and the VIX should at least rally towards the middle band and most likely the upper Bollinger Band. The break and close above the middle band yesterday confirms the rally towards the upper band.

It's also interesting to see, that the VIX never confirmed the last top in the S&P 500 by not making a new low. All in all we could well have seen an important top at 1,148.24 and the beginning of wave 3 down.