VIX Found Support 7/21/2020
The VIX found support at this week's major support line (dashed green line) this morning. P/C Ratio lowered while the ES was hovering at historical resistance.
So, the VIX recognizes this as buyers getting exhausted. It's currently trapped in that green zone. That said, if the VIX continues with its volatility run, it has almost EVERY daily moving average above acting as resistance. Liquidity is pretty high too.
The bull case is that the VIX is stopped at another resistance above then settle down again with minimal pullback. However, a smart bull would hope the VIX makes a big run up. It would provide one epic bounce on the ES.
The bear case is that the VIX would break out of the wedge resistance (blue line).
The VVIX is provided a clue yesterday that volatility hasn't ended. It came true today. Now the VVIX is implying that more volatility is ahead. Not sure when.
All I'm missing is a panic selloff by the FOREX traders.
I don't plan on shorting especially with liquidity levels being this high. Shorting requires the VIX, VXN, VVIX, P/C ratio, weak liquidity, and weak breadth to be all on your side. It's why so many bears fail and cover their shorts over and over and over. They jump in with their emotions and pride instead of actually reading the data.
No matter. If we do get a selloff, I'll exploit the shorts by going long at a major support then ride up the short covering rally. The internal data is on the bulls' side right now.
So, the VIX recognizes this as buyers getting exhausted. It's currently trapped in that green zone. That said, if the VIX continues with its volatility run, it has almost EVERY daily moving average above acting as resistance. Liquidity is pretty high too.
The bull case is that the VIX is stopped at another resistance above then settle down again with minimal pullback. However, a smart bull would hope the VIX makes a big run up. It would provide one epic bounce on the ES.
The bear case is that the VIX would break out of the wedge resistance (blue line).
The VVIX is provided a clue yesterday that volatility hasn't ended. It came true today. Now the VVIX is implying that more volatility is ahead. Not sure when.
All I'm missing is a panic selloff by the FOREX traders.
I don't plan on shorting especially with liquidity levels being this high. Shorting requires the VIX, VXN, VVIX, P/C ratio, weak liquidity, and weak breadth to be all on your side. It's why so many bears fail and cover their shorts over and over and over. They jump in with their emotions and pride instead of actually reading the data.
No matter. If we do get a selloff, I'll exploit the shorts by going long at a major support then ride up the short covering rally. The internal data is on the bulls' side right now.
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