In addition to the extreme Vix level discussed in the prior post, an additional headwind for the market here is that the IWM is in end-of-trend territory on the Fractal Dimension Index. Take a look at this daily chart (click to enlarge):
Notice that the FDI is down to a level now (black arrow) where the July rally ended (blue arrows). So, the small caps are likely to consolidate or pullback in the near future. Other sectors with similar, low FDI readings are: XME, XBI, XLE, and JNK.
