If, like me you have had to take a break from trading and the markets, it can sometimes be difficult to pick up the threads and re-orientate yourself to the emotional state of the market.  And perhaps the best place to start is with the major indices, in particular the VIX, the Dollar Index and the NASDAQ.

Starting with the VIX, we are now entering an extremely interesting phase of price action with the index finally breaking below the strong platform of support which has held firm at the 12 region for over a year. The index broke through this key level last Friday with a wide spread candle on the weekly chart to end at 11.36 – a dramatic move.

The significance of this move cannot be underestimated and perfectly encapsulates the current market mood, which is essentially deeply complacent. If this technical breach is validated in this week’s trading we can expect to see equity markets continue firmly higher in contradiction to the broader economic landscape.

Such a strong signal of market complacency has, of course, implications for all other asset classes and makes trading (particular intra day trading) very tricky as volatility ebbs away and markets simply drift.

From a technical perspective the key is patience and understanding how the inter-relationship between price action, volume and time will deliver the necessary signals when this current period of market doldrums decides to come to an end.

In many ways the age old trading chestnut of “Sell in May and go away” may be appropriate this time around.

Equity investors/traders can use the iPath S&P 500 VIX Short-Term Futures (VXX, quote) ETN to take short term positions in the VIX. The ETN attempts to track the short term moves of the VIX future and should not be used for long term use due to its fees and structure