Note how the SPX is at or near a bottom when the VIX spikes above the upper .
Finding SPX tops is different. Many traders mistakenly think that when the VIX is reaching a bottom it signals an SPX top. Most of the time the VIX will need at least one divergence to signal an SPX top. Note the August 15th SPX top had a small VIX divergence. This phenomenon works on a larger scale as the SPX is higher in November while the VIX is also high.
As of November 23rd there's still no VIX divergence for the rally that began on November 4th. There is however a developing VIX divergence on the intra day chart which I will illustrate in my next post.