OVX, CBOE Crude Oil Volatility Index (INDEX)

Today, Crude oil topped out and then instantly backed off again. Since we could be heading into an oil correction bigger and longer than the bulls expect, then this OVX index should soar. I’m sure the OVX will crash through 14, but it may not do it on this trip. Any oil bear market should push this index higher, with major resistance at 80-89. I can’t help but use a few Fibonacci whole numbers, which are very close to resistance patterns as well. The low was 17.24 ending with a nice spike, so we want this number to hold.

When oil declines much more and we get a decent corrective pattern, then this OVX index, should develop a 3 wave bullish move. Many of these spikes can be ignored, but they sure help in seeing the huge triple top. The same top line also shows a big H&S pattern, with the potential of another one coming up. This is all speculation before it happens, but it must be done if we are to confirm a bottom in the next bearish crude oil cycle.