The VIX should break out of this compression wedge, and the dollar's been range-bound perhaps too long as well

As the VIX has been sinking yet lower, the dollar has been very weak also, even though the dollar didn't touch the retracement line I'd marked off at 77.92. That level would place the dollar just slightly under its June low. There may be a cycle low still ahead that the dollar is "waiting for", and maybe that's influencing the VIX as well.

I marked a near-term pattern with trendlines showing the compression wedge that the VIX has tightened into the past couple of weeks. Often a chart pattern like that suggests that a move out of it will be snappy. Given how extended the VIX has become from the "bow tie" of moving averages, something like that wouldn't be too surprising. Today almost looked like it might turn into a trigger day like that, when it opened above yesterday's candle body, but then of course it just declined into the afternoon ... maintaining the wedge shape.

So the VIX chart isn't saying, "buy the VIX" or "buy VXX" just on a trade trigger basis. For that matter, neither is the dollar! But both of them are saying to keep an eye on. Both have been compressing, suggesting that both are likely to make a more substantial move whenever they do spring out.

For the dollar, of course it remains possible for the dollar to break to the downside instead, in which case not only would that be likely bullish for the euro but probably bullish for gold too. We're conditioned to think that would be bullish for equities also, and perhaps it would be, but I'd want to be evaluating the charts on their own anyway. But first, I'm going to remain alert just in case the dollar decides it's ready to move up; or conversely, on another move down, to check for support if it does test that 77.92 level.