VIX's Scheduled Jump 8/11/2020
VIX at the 4 hour view.
It looks like I still got it. I was right with my revised date range last Friday and yesterday. My date range for a VIX jump was Aug 10 to Aug 12. I say revised because my original dates were Aug 6 to Aug 10. However, the VIX algorithm last week showed me that supports have changed, so I had to adjust accordingly. It was worth it.
The VIX broke the local wedge resistance and closed above it. The VVIX is breathing life again. That said, this volatility jump will be short lived as usual. The MCI and NFCI indicate that liquidity is at the highest levels since November 2019. This strengthens major supports on the ES and cuts short of the volatility jumps.
The pullback on the ES was to be expected if you look at how much time there was left on the VIX. Being at the end of the wedge, the VIX was ready to jump. The VVIX was also above 110, so volatility hasn't ended yet. Not to mention the ES was overextended from the uptrend supports.
The market psychology adds up. New traders were singing all-time high this morning. That market has a way to contradict the current sentiment.
With liquidity being this high, the VIX will only have 1-3 days of volatility before getting held back again. So, the downside on the ES is very limited unless all that available cash below suddenly disappears. Fat chance.
With liquidity being this high, I am not confident to long the VIX especially with a day job. The trend is still intact unless the ES can close below 3155 this week. Fat chance.
The easier trade is to wait for the pullback to end and long at major supports. The high liquidity will carry to you up. There are so many buy orders waiting below. Shorting the VIX is an easier trade too since the VIX naturally goes down anyways. If you didn't short the top of the VIX, oh well. Time would be on your side. I'll update that wedge resistance once I know where this spike ends.
It looks like I still got it. I was right with my revised date range last Friday and yesterday. My date range for a VIX jump was Aug 10 to Aug 12. I say revised because my original dates were Aug 6 to Aug 10. However, the VIX algorithm last week showed me that supports have changed, so I had to adjust accordingly. It was worth it.
The VIX broke the local wedge resistance and closed above it. The VVIX is breathing life again. That said, this volatility jump will be short lived as usual. The MCI and NFCI indicate that liquidity is at the highest levels since November 2019. This strengthens major supports on the ES and cuts short of the volatility jumps.
The pullback on the ES was to be expected if you look at how much time there was left on the VIX. Being at the end of the wedge, the VIX was ready to jump. The VVIX was also above 110, so volatility hasn't ended yet. Not to mention the ES was overextended from the uptrend supports.
The market psychology adds up. New traders were singing all-time high this morning. That market has a way to contradict the current sentiment.
With liquidity being this high, the VIX will only have 1-3 days of volatility before getting held back again. So, the downside on the ES is very limited unless all that available cash below suddenly disappears. Fat chance.
With liquidity being this high, I am not confident to long the VIX especially with a day job. The trend is still intact unless the ES can close below 3155 this week. Fat chance.
The easier trade is to wait for the pullback to end and long at major supports. The high liquidity will carry to you up. There are so many buy orders waiting below. Shorting the VIX is an easier trade too since the VIX naturally goes down anyways. If you didn't short the top of the VIX, oh well. Time would be on your side. I'll update that wedge resistance once I know where this spike ends.
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