The last two days VIX did something it has not done since May of this year. The decline stopped once it got back below this MA. Leading up to this latest breakout, VIX would briefly get above it only to drop back below and continue its downtrend. Finally this week VIX broke above the 70 day at 16.28 and broke its downtrend line. This is bullish for the VIX and bearish market. VIX got above its 70 day moving average in May and it started the summer decline.
But one instance last summer doesn’t mean much. We have to look at other times this occurs.
This chart shows this trend going back even further to 2008:
It is very possible to see the market decline any where from another 3% to 20% based on this pattern. The signal to go long will be when the VIX drops below the 70 ema, right now that is at 16.28.