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The EW team says it all...

Yesterday’s surge to an intraday high of 42.16 in the CBOE Volatility Index (VIX) was climactic, registering the highest intraday reading since October 9, 2002. That was a solid low in the market. Yesterday’s surge and reversal MAY mean that stocks need to breath again prior to resuming Intermediate wave (3) down, which, if correct, would favor that Minor wave 2 up was still unfolding. Yet despite today’s surge, the DJIA and NASDAQ 100 both still ended the week lower! With nearly all other market’s ending higher though, we will give the benefit to the broad list of advancing issues. And in terms of advancing issues, today’s NYSE breadth figures were large, with the a/d ratio closing at 7.9:1, the strongest upside breadth since March 18, the wave (1) low. NYSE up volume closed at an unofficial 86.6% of up and down volume. While not quite 90%, it nonetheless was very strong. If stocks were to resume their larger decline immediately, particularly in the face of these strong breadth and volume measures, it may spark a downside panic. So Monday and Tuesday are likely to be two important trading days with respect to the market’s trend for the coming weeks.