Liquidity Downing the VIX 8/5/2020
Cập nhật
This is the VIX at the 4 hour view.
I had to adjust my support lines ever since the algorithms did a support test that was lower than usual. The VIX is now in a major support zone of 22-24. Conventionally, 20 is the line in the sand for volatility. However, conventional thinking is usually wrong - like how the markets will collapse by May. Why did I change the support levels? It's because the VIX is mainly formula and algorithm based. I have to adapt to what the algorithms are telling me. They're telling me that support has moved a bit. Not much, but enough to mess up my previous chart.
Due to what the algorithms are telling me, the supports moved a little lower. Thus, the timeline of the next projected volatility jump may be around 8/6 to 8/10. Maybe 8/11, but fat chance.
I am not expecting a big volatility jump like in June 10th. Liquidity is pretty high still, but plateauing. However, what matters is that liquidity is still very high. Thus, liquidity solidifies the supports on the ES and the resistance on the VIX. Why do I think volatility has not died out? The VVIX still hasn't close below 105 for multiple days. The VIX is starting to play possum, but the VVIX is keeping a little secret.
If I am wrong... which I am actually hoping that I am wrong... the VIX may find a key support and make a bigger jump than expected. That happens on the very rare occasion that liquidity breaks for 1-2 days. If that happens, I would shamelessly buy the dip in equities after the VIX settles down.
I had to adjust my support lines ever since the algorithms did a support test that was lower than usual. The VIX is now in a major support zone of 22-24. Conventionally, 20 is the line in the sand for volatility. However, conventional thinking is usually wrong - like how the markets will collapse by May. Why did I change the support levels? It's because the VIX is mainly formula and algorithm based. I have to adapt to what the algorithms are telling me. They're telling me that support has moved a bit. Not much, but enough to mess up my previous chart.
Due to what the algorithms are telling me, the supports moved a little lower. Thus, the timeline of the next projected volatility jump may be around 8/6 to 8/10. Maybe 8/11, but fat chance.
I am not expecting a big volatility jump like in June 10th. Liquidity is pretty high still, but plateauing. However, what matters is that liquidity is still very high. Thus, liquidity solidifies the supports on the ES and the resistance on the VIX. Why do I think volatility has not died out? The VVIX still hasn't close below 105 for multiple days. The VIX is starting to play possum, but the VVIX is keeping a little secret.
If I am wrong... which I am actually hoping that I am wrong... the VIX may find a key support and make a bigger jump than expected. That happens on the very rare occasion that liquidity breaks for 1-2 days. If that happens, I would shamelessly buy the dip in equities after the VIX settles down.
Bình luận
Update: The algorithm did another support test today. I have to redo my support lines again accordingly. The algorithm is stating that this thing will be heading further down this week. Volatility jump just got delayed.
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