Daily Archives: February 11, 2018

VIX Explosion Update

The VIX has demonstrated what it can do after it is boxed into a corner or a wedge like condition. To the majority this was a surprise move that they never saw coming, but there are the few that did see it coming. The commercial traders sure saw it coming as they were net long for sometime already. Of course the non-commercial speculators were extremely bearish towards the VIX. How can you lose on a sure trade betting against volatility?

It’s easy if you owned a bunch of XIV shares and don’t know how to read charts. Of course, someone will always get blamed for, “taking down the house”.  In my experience, it’s always the speculators that get into traps. The speculators, trend chasers, or managed money people, is always the group, being quoted in the financial news. When they are quoted,  they are just about always in a trap as well.

The XIV will disappear as it sounds like they will stop trading in XIV by Februray, 20, 2018.

Last Friday they posted the COT report in the VIX. We can see a massive change by the commercials to a point where they are now in a net short position by about 45,000 contracts. Of course the speculators panicked and did the exact opposite.  In other words, they are chasing the VIX bull market. Eventually the speculators will get into a bigger VIX bull trap and the markets will force another reversal.

There is a good chance wave 2 in Minor degree has finished with waves 3-4-5 still to complete. After these 5 waves up in Minor degree have completed, then we should see a massive VIX crash that will shock the majority again.

The VIX peaked at $50 and eventually the VIX should cross the $90 price level. The VIX may not do it on this trip, but by the time this bear market is finishing I’m sure the VIX will far exceed $90