A Bearish Chart Reverses

The Mexican peso breaking down was one of the most bearish charts I'd seen because it is highly correlated with VIX. Inversely with the peso, positively with the USDMXN cross. 

Since this has become a failed breakout, this is now a strongly bullish signal for the overall stock market and a sign that VIX may decline in the coming weeks. It is volatile enough that it could traverse the entirety of the pattern over the next month. A decline to the red support line would require a 3.6 percent decline in USDMXN, a decline of 5 percent takes it to longer-term green support. 

The two don't move one-to-one. MXN had been overshooting VIX lately for example. The best time for correlated charts with weak short-term signals (palladium and Nasdaq being one of the worst with a time lag as long as a year) are when one of them generates a strong signal on its own. Peso broke down the past couple of days and now reversed. VIX didn't confirm the breakdown in the peso. Now the breakdown has reversed. As far as this relationship goes, that's a fairly strong bullish signal for stocks here, and a bearish one for USDMXN and VIX.