After forming a 2 month flag pattern, the VIX has broken out. The VIX itself could undergo a little more volatility, as it breaks above its previous resistance line and follows the wide downtrend. Interestingly enough, the patterns of the RSI and the price match up exactly. Expect lower lows and lower highs as the VIX consistently hits the next resistance line, only to bounce off the support line. In the short term expect the price to fall until it hits the support line. The VIX has two support lines in the near time so I wouldn’t expect a fall out of the channel. A breakout from the top resistance in the channel, at the 38.50 level would cause me to look at calls for the VIX.
