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.

VIX & S&P 500 - Do we really need one more new high?

Yesterday I wrote that the decline from 1,213.86 was a five wave decline, which would call for a three legged rally towards 1,204 before a new decline to at least 1,175 should be seen, but the rally went well beoynd 1,204, whats more important the shape is of concern as it looks like a running triangle. If it's a running triangle we should see one more rally higher towards the 1,214 area today, before prices collapses.

This also fits the VIX-count, shown below.

An Ending Diagonal (ED) is shaping up, we just need one more decline to just below 15.23 ending the final leg v down in the ED, which should be followed by a powerfull thrust
to the upside.

If you shorted the S&P 500 yesterday near the 1,204 area you could choose to close the position on a break above 1,208.07 and re-sell near the 1,214 target area or you could just hold on to your position waiting for prices to collapse from near the 1,214 area.