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Citi is officially worried

Not a big surprise since the number of October put contracts against the S&P 500 is up like 5000% from the usual average.

From CitiFX:

 
 

"""The set up on the VIX is now looking increasingly like a double bottom within a triangle. This often results in an explosive breakout. 

The levels detailed below need to be watched carefully as if they go then there is a danger we get to out 1,000-1,015 target on the S&P a lot faster than we thought.
 

 
 

The set up on the VIX is now looking increasingly like a double bottom within a triangle. This often results in an explosive breakout.

 

The levels detailed below need to be watched carefully as if they go then there is a danger we get to out 1,000-1,015 target on the S&P a lot faster than we thought.

 

The pattern above is one of our favourites when completed (A double bottom within a triangle.)

 

So far we have not managed a daily close above the neckline which stands at 43.18%.

 

A close above here would complete the double bottom and suggest an impulsive move higher to at least 56%.

 

That is a problem. Not only does that suggest another sharp selloff in the S&P 500 but it creates an even bigger breakout.

 

It has not been our base case scenario that the 48.00-48.2% level will be broken on a weekly close basis on this chart. If, however that does happen then there is a real danger that our 1,000 target on the S&P gets hit much quicker than we think.

 

The pattern on the daily chart above suggests that if we close over 43.18% we will go over 56% which by definition means that a close over 43.18% suggests that the 48.00-48.20% area will give way.

 

A weekly close above here would almost certainly suggest a move to our 1,000-1,015 target on the S&P 500 extremely rapidly. Such a development would also strongly question our present view in today’s’ weekly highlights that further consolidation was likely in the short-term before the next move lower in “risk”.

 

The target on such a break for the VIX would be at least 80%+...we are now officially worried."""

--- stolen from zerohedge with thanks and apologies.