Volatility Index Island Bottom

Monday saw the Volatility Index ($VIX) gap down below where it was on Friday and today we saw the $VIX gap up above yesterday's close to form an Island Bottom. It is the solitary white candle that is second to the last in the chart below. As long as the gap is not filled we have a chance of having yesterday being the high in the market. The $VIX moves inversely to the market and if the $VIX continues to rise the market will decline. The area of 20 has been pivotal in the past and if the $VIX gets above 20 without filling the 17.74-17.94 gap then we could see the beginning of a trend change in the market with a move to the downside. While yesterday may be a top in the market and a bottom in the $VIX only time will tell and we will just have to wait and see. Click on chart to enlarge.