With the S&P 500, Nasdaq Composite, and VIX all knocking on special levels for us - along with the US dollar and gold - it's time to stay alert

For a review of how the S&P 500 (SPX) and the Nasdaq Composite look, I've borrowed Tony Caldaro's hourly chart from his Elliott Wave Lives On site (his charts are available from his public charts link there) (and thanks again, Tony, for letting me post these!). That chart is at right; also, his daily SPX chart, and his daily and weekly VIX charts, are below. I added just a few lines onto Tony's hourly SPX chart, and onto his VIX charts, just to delineate a few of the channels to keep in mind when looking at these indices. You can see that the SPX price movement is decelerating as it approaches Tony's 961 pivot, which also is right in the area I've got for a long-term Fibonacci level (about 961/963).

If you read Tony's update at his site (the link is also included in the "other sites of interest" at the right side of the page), you know he referred to the SPX looking overbought on the daily chart; in addition to the deceleration or negative divergence on the hourly chart. There are similar indications in his Nasdaq Composite charts (below his daily SPX chart, below).

The Nasdaq Composite is further interesting because it's tagged a Fibonacci projection I've had for it, and it's also part of the way to closing a gap (as I've shown on the Nasdaq McClellan charts before, and marked again in those charts which I posted as updated through today, at my UBTNB3 blogspot (see links at right)). Its move up also places it getting much closer to its 34-week exponential moving average (interestingly, both SPX and DJIA are above theirs).

For that matter, there's deceleration showing in the daily VIX chart. I know I've been discussing quite a bit the Fibonacci retracement levels in this index. When you look at Tony's weekly chart of the VIX, you can see how far down it's come since the late 2008 highs and much closer to the 2007 lows. When I added my uptrending angle line onto Tony's weekly VIX chart, it actually "fit" very well, with the VIX level touching down toward it. So, at this point, the conditions are ripe for the VIX to make a turn - if it will. If so, that could happen tomorrow, just based on looking at the chart position and indicators. The KI$$ approach is to wait and see if that happens with a trigger day (which would mean not making a new low, AND closing above today's high). The fact that the VIX is exhibiting this pattern and price level, at the same time that the SPX and Nasdaq Composite are testing similarly important levels that have been discussed here before, implies that we should remain alert for a reaction that might start tomorrow. Obviously the next question is, what type or level of reaction might be expected?

Assuming that indeed, a turn does occur, it doesn't all have to "show up tomorrow," nor does it necessarily have to be "the big one." But the levels I've mentioned for all three indices are significant ones, and their convergence in this time frame is also happening alongside significant levels simultaneously being tested in the US dollar and gold (I'm posting those two charts at the UBTNB3 blogspot, too). It had looked like these things would be coming together back when the VIX was testing 33.81, and in fact that was almost like a rehearsal for what we are seeing now. Now, the VIX level being tested is "even more significant", as are the SPX and NASDAQ Composite levels, and even the US dollar level. So, sure - these factors coming together certainly does deserve special attention now.