The Volatility Index (VIX) is one of our most reliable sentiment indicators. The VIX is a popular measure of implied volatility of S&P 500 index options. In other words, the VIX tells us what the market believes is in store in the near-term in terms of volatility. It's a gauge of market risk. We know from history that as the VIX rises, it generally spells trouble for stocks. Volatility and fear are somewhat synonymous. When the VIX falls, the bulls are normally in control of the action. Identifying critical patterns in the VIX can provide clues as to the ultimate direction of equities. Currently, the VIX is in an uptrend and has been hanging onto price support near the 23.00 level. So long as that holds, the bulls are likely to be held at bay. However, if the bulls can bring that VIX down below 23.00, then more potential upside in equity prices arises. We are in a triangle formation with the key support at 23.00. For now, our key resistance comes in near the 30.00-31.00. Let's see which level breaks first.