Reversal After Reversal

At yesterday's close I would have said we were on our way to 1200 on the S&P. I liked what the VIX was telling me: it punctured its 2 standard deviation line to the upside and reversed. I held my call position and hedged more as the ES moved strongly above 1185, then trimmed back the hedge (SDS) as it corrected off the trend line from Nov. 9th. I was sure that I'd be taking heat of the SDS position this morning. The pattern that is developing is looking more and more like a falling wedge. Should the S&P convincingly break 1173 it will target 1150. Even though the futures are in a buy zone at the moment, they will have to prove themselves for me to add calls. I'll be letting the market digest this overnight move.