Bears need a $VIX spike? Are you mental? They just had a big spike! Well yes and that’s the problem. While the $ES has made a series of new lows the $VIX has been making lower highs and that presents a big problem. Over the past year all market drops ended when the $VIX either had two topping candles or when it ended making lower highs. After that it was all over for bears:

In context of the January analog I’ve been pointing out it gets potentially mission critical here as the big overnight dive into the $ES 1890 range qualifies as day 7 in the analog. With next week’s OPEX on the horizon then bears may find themselves squeezed hard if the $VIX drops here which it very well may do if the $ES breaks above this pattern below:

Our strategy has been to long the overnight weakness on the day 7 premise and the various indicators we are following. So far, so very good.