VIX is the volatility index for the S&P 500. It works in an inverse correlation to SPY so when VIX goes up, SPY goes down. There has been a common zone that whenever VIX dips into it, it skyrockets. Just a couple weeks ago we dipped into that zone and we have experienced an average move of -15.5% on SPY whenever that happens. Its also good to take into consideration that we have another year long trend that is in place. SPY has well respected a resistance line that dates back to late last year. Although we have technically broken this trend line, I am a firm believer in Gann's theory of lost motion so I believe we still have a chance to reverse. The most important part of the VIX setup is that PRICE NEVER HAS A WEEKLY CLOSE ABOVE THAT PRICE AGAIN. We just have to wait until the closing on Monday to see if this trend gets broken. The economy is also an important thing the consider with this trade setup. I believe that the bear move is signicantly more likely because of the federal reserve's actions on inflation. They have confirmed that quantative easing will start AT MINIMUM 6 months from now. This means we still have more of the recession left in us. We just have to wait till the start of next week for this to play out. If we close below the start of this setup, I am going short on SPY.