Make Up Your Mind, VIX 8/12/2020
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VIX at the 4 hour view.
There are two blue lines which acts as wedge resistances. The sky blue line was the old wedge that broke yesterday. The darker blue line is the new (temporary) wedge resistance that was formed yesterday.
The VIX went back to the old wedge resistance. When the VIX is like this, it's making a transition over to the new wedge. What does that mean? It's more likely that the VIX will make a small hop to break the old wedge resistance and calm down until it reaches the end of the new wedge.
Why don't I think that the VIX will just fade away? Put/Call Ratio is still below 0.75. So, the VIX recognizes excess greed within the indices right now. Furthermore, the VVIX (implied volatility) is still above 105-110. The VVIX is like the hidden engine within the VIX. Whereas, the VIX shows volatility in the current time, the VVIX is an indicator for volatility in the future.
Why don't I think it will burst to above 30? Simply, liquidity is high enough to go surfing in. There are too many buyers and available cash below in the ES for the VIX to make a significant move.
In the new wedge, I have a projected volatility jump (more like a bunny hop) around August 17-19. Coincidentally, that is around the date where the ES' new ascending wedge ends. And no, I am not confident enough to go long on the VIX at these liquidity levels. The easier trade is to short the VIX after a 1-2 spike.
There are two blue lines which acts as wedge resistances. The sky blue line was the old wedge that broke yesterday. The darker blue line is the new (temporary) wedge resistance that was formed yesterday.
The VIX went back to the old wedge resistance. When the VIX is like this, it's making a transition over to the new wedge. What does that mean? It's more likely that the VIX will make a small hop to break the old wedge resistance and calm down until it reaches the end of the new wedge.
Why don't I think that the VIX will just fade away? Put/Call Ratio is still below 0.75. So, the VIX recognizes excess greed within the indices right now. Furthermore, the VVIX (implied volatility) is still above 105-110. The VVIX is like the hidden engine within the VIX. Whereas, the VIX shows volatility in the current time, the VVIX is an indicator for volatility in the future.
Why don't I think it will burst to above 30? Simply, liquidity is high enough to go surfing in. There are too many buyers and available cash below in the ES for the VIX to make a significant move.
In the new wedge, I have a projected volatility jump (more like a bunny hop) around August 17-19. Coincidentally, that is around the date where the ES' new ascending wedge ends. And no, I am not confident enough to go long on the VIX at these liquidity levels. The easier trade is to short the VIX after a 1-2 spike.
Ghi chú
VIX literally trying to make up its mind with the light blue line.
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