Tag Archives: VIX

VIX Intraday Crash Update!

The VIX rocket move perfectly reflects the fear that was present in the SP500 and the fear gage is starting to dissipate for now. Of course, if the bigger bearish scenario is alive, then the VIX should find a bottom, followed by another leg up.  This leg up could produce another complete set of 5 waves up, but not before a good correction has taken place.  This may not happen until the VIX settles at the previous bottom of the 4th wave position.  Just below that is a big gap that is still open, so this open gap has a good chance of also getting filled with this trip down. Just under $15 would close the gap which can repel the VIX to soar again.

Higher lows also have to dominate as well to help confirm that the VIX is still in a bull market.


VIX Futures Intraday Bullish Phase Update

Just before the end of February the VIX bottomed and now has to proceed back to its bullish phase. I think the entire VIX correction is a flat, as I count 3-3-5. Change this same pattern to a Primary degree flat, and we can use it for the DJIA Cycle degree correction.

Many VIX spikes that show in bar type charts, do not show up when switching to line type charts. This throws any wave count into constant disarray. We can see how explosive the VIX can be and I’m sure many new players have joined the VIX bull market.

Eventually all the contrarian indicators will pile up against this VIX bull market, so those VIX investors find themselves in a bull trap! VIX bulls will get slashed by the bears if they think they can “invest” in the VIX.

Our last price peak was about $50, so any bullish phase should surpass this price level by a large margin.

The VIX Crash Daily Chart Update

The VIX spiked up to 50 after which it turned south with a vengeance.  It was an ugly correction and if I’m right,  then another leg up in the VIX will happen. We can see that the VIX  developed a “wedge”  which every technical analyst is taught to recognize, yet they never saw this explosive VIX rally coming.  Everybody on this planet was betting against volatility, but in doing so the VIX bears painted themselves into a bear trap.

Yes the commercial traders ended up becoming net short the VIX, but that can all change dramatically in a very short period of time.

One thing we can always depend on and that is investors can easily get into a trap, and recognizing this fact before it reverses is very important. The VIX is a world full of diagonal wave structures so don’t expect some perfectly formed impulse waves to develop. It isn’t going to happen,  no matter how much we wish any pray for it to happen.

In late 2008 the VIX had already peaked out at 90, yet the bears persisted in forecasting lower lows in stocks.

Insiders were buying stocks in late 2008 already, so the VIX bull market was doomed at that time. Will this happen again?, of course it will, nothing will stop it. When the public and the VIX are in general agreement, then the VIX will see a dramatic reversal. This will not be easy to catch as the VIX may have to score 100+ before a big reversal becomes a reality.

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

The Explosive VIX Review

The VIX had one of its biggest one day price jumps in its entire history, which the majority was betting on that it would never happen.

The dumb money or (managed money) were already in a massive bear trap, while the commercials had built up huge long positions.

Those investors that think they are investing will always get fried as you don’t invest in anything that is extremely leveraged and a futures contract that is all about volatility in the first place.   When you are playing with fire, you can’t expect to not get burnt, but these emotional traders will blame others first for their mistakes.  Being complacent in a violent and volatile world is the biggest mistake we can make.

The commercial reports don’t come out until Friday, but we should see the commercials closing off their long positions, but could also be building up their net short VIX positions.  This doesn’t happen overnight, but can be a long  process.

The VIX spiked to the $50 price level, but the $90 price level is the number to beat as that is the 2008 peak in the VIX.

Crash OF XIV Inverse Stock Split Coming Up?

XIV trader: ‘I’ve lost $4 million, 3 years of work and other people’s money’ – MarketWatch

I read the story above about the huge losses this XIV trader suffered. I’m sure he was not the only one as XIV crashed dramatically this week. This XIV ETN followed the bull market up as complacency dominated the stock market again. I don’t have any sympathy for those that think they are investing in double leveraged products, without thinking how much of a bull trap they were in, in the first place.

Smart money would already have been short, long before this topped out. This XIV crashed all the way down to $6.15 and I don’t think it’s finished by a long shot.  Since it is very close to that magic $5 price level, any inverse stock split is highly likely. Usually we would be looking at a 4:1 inverse split which would price this ETN at about $24.

A simple tight stop loss would have protected most of your gains. Investing for the long term means nothing if we can’t see a potential crash setup, where all gains can get wiped out. The real VIX spiked up just like this ETN spiked down. I’m sure there were tons of stop loss orders crammed under the peak, so it takes very little to roll over and trigger these sell orders.

DJIA Intraday Counter Rally Update!


Now that the initial shock of, “The Big Dip” is starting to sink in, a counter rally seems to be in progress. I will work this as a potential wave 2 in Minor degree.   There is a December bull market resistance area which could surprise us and give any bullish run some stiff resistance.  Wednesdays can always be  a good day for turnings, and so far the decline has been taking a break.

This potential wave 2 rally could take the rest of the week to play out, but the odds are that the bigger bearish trend will continue.  Some are calling it the biggest one day point drop in history.  Some of the analysts are also calling Mondays move a “Blue Monday”, which is just a name change from what they used to call,  “Black Monday”, or any other day of the week.

Many talking heads, are looking for a simple 10% correction after which the bull market will carry on heading north.

The stock market crash so far is just a little bee sting and does nothing to solve underlying fundamental issues. Many experts don’t see any change in the fundamentals, so this bull market should be right back. Good luck with that thinking as fundamentals do not change prices, but price shifts change fundamentals. By forecasting a future price move, we know that the fundamentals will change as well.


This is the VIX, which made the biggest one day jump in its entire history  as the VIX bears all got trapped again. It’s the VIX that gives a direct visual of the fear injected back into the markets. The VIX peaked out at  the $50 price level, which ended up being just 40 points away from the fear level of the 2008 stock market crash.   Eventually that $90 VIX price level should get exceeded by a wide margin.

The VIX should decline again if we are at a potential wave 1 in Minor degree. Any wave 2 decline with the VIX may not last that long, as fear levels like this cannot be maintained indefinitely.


VIX Impending Correction.

The VIX sliced through the top trend line before it reversed. This trend line sure seems to give any VIX bullish phase some pause, but eventually the VIX would have to clear 5 of the biggest spikes, by a wide margin.  The VIX could dip down to the $11 price range before it bottoms and soars again.

VIX Intraday Update: Another Leg Up?

Since early January 2018 the VIX has created a bottom after which the VIX charged up.  There is a high probability that the VIX correction is over, and it should add on another leg up. I will stay with the diagonal wave count as that is the main pattern of the VIX as well. The commercial traders are still net long by a long shot, and if the VIX continues north than this ratio should start to change as well. That won’t happen overnight, but we are assured of some violent moves in both directions.

We do have 2 open gaps below present prices, but they may not get closed on this trip. Even though the SP500 is still breaking new records,  fear is creeping back into the markets.  Right now the $14 price level could give us some stiff resistance, but if the bigger run is in the cards, then that $14 price level well get retraced by a wide margin. The $17 and $21 price levels, should be next to get hit if this run has any legs at all.

Quick Look At The VIX

Today the stock markets took a big hit, and the VIX soared. The VIX is in a vertical position right now, which usually precedes a correction or a reversal. Once we check the top trend line on the daily VIX chart, we can see that the VIX is pointing to the $14-$15 price range where strong resistance can come from.

We also have two open gaps well below todays VIX prices. It doesn’t necessarily mean that these two gaps, have to get filled on the next trip down, but there is a good chance that the $10.20 gap could get filled.  Any short small correction could happen, then this bullish phase will develop another leg up.

The commercials have had net long positions for a long time while those speculators have been betting on much lower VIX lows.  I’m sure you will read other analysts that report the trader’s positions, but they always tell you what the speculators are doing. The commercials were on the right side while the speculators got themselves into a bear trap! Following a group of traders that consistently trap themselves is not exactly my idea of the smart thing to do.

When the commercials become net short again, then I can see a big reversal with the VIX.

VIX Intraday Crash Update

The VIX crashed pretty good at the start of 2018. We are also at a 2 month long base,  just below that $9 price level. A record high for stocks and record lows for the VIX does not bode well for 2018. Analysts will twist the VIX results to justify the continuation of the bull market, giving even more incentive to stay long in these stock markets. Many question how much higher this market can go, but in reality they should be spending their time in figuring out how low these markets will eventually go.

The contrarians can scream off the top of a mountain that this stock market is expensive, but we know that the majority have never been listening in the first place.

At this recent VIX bottom the charts look like the algorithms are back at it again as the patterns are very tight and near vertical up and down.

The Mini SP500 soared to new record highs this morning as well, topping the 2728 price level. Another VIX bear trap and stock bull traps seem to be setting up at this time.

December, 31, 2017 Year End VIX Update

A year end look at the VIX can give us some insight as to what is going to happen in the next 3-4 years. The VIX peak on your top left matches what I have is the Intermediate degree wave 4 top. What followed this VIX top was a long drawn out decline, with many counter rallies, that all ended with  vertical spikes. A person would be hard pressed to find any clean set of impulse waves during this decline,  except for very small degree level sequences.

What it boils down to is that anything with the VIX are all diagonal wave structures. Our “Little Blue Book” only shows what they call an “ending diagonal”. The fact is, these so called, “Ending Diagonal 5th Waves”,  can and do extend dramatically, far beyond what they ever show us in the EWP book. In the book they also show us pretty idealized charts, all subdividing into nice even wave structures. The simple truth is that you will “Never” find these pretty wave structures, because nothing in the markets is ever even.

What the VIX really shows us is a declining market with a potential wedge like pattern. For the last 3-4  months the VIX is setting up a massive base just below the $9 price level.  The two previous upward spikes came to a screeching halt, at the top trend line, before heading south again.  This base is now the lowest since the last major low in December of 1993, 24 years ago.

With the bottom base line being flat, the VIX bears are getting squeezed into a box. These boxes or uneven triangles can produce wild upward thrusts, that shock  us when they do happen. We will get a surprise if we choose to ignore these VIX bear trap situations.

The first peak we have to beat is the $21 price level, and then the $30 price level. Technically speaking, the VIX should exceed or retrace this entire VIX bear market, so hang onto your hats folks, as the VIX winds are going to start blowing to the northeast, sending stock markets southeast.

December, 13, 2017: VIX Intraday Crash Review

In early December the VIX spiked and then reversed and crashed. Vertical moves like this can never be maintained as they are also the fastest moves we can have.  $14.60 seems to be the price to beat and if my zigzag decline is correct,  then this $14.60 price level will get retraced.  We have an open gap just dead ahead so that could provide some resistance again, but at the same time could supply support, for a much stronger VIX move. 

The markets are at euphoric bubble highs with the VIX at record lows.  The VIX is where the real fear is shown with charts, and at this time investors show no real fear, just yet.   The fear will come back into the markets as bullish record highs always traps the majority. Thinking that good times are still to come,  always means  the end of a bull market, not the beginning of one.  

The VIX Intraday Spike Review

With this bar type setting the VIX produced a sharp spike to the downside. I like to see this happen towards the end of a long decline, but this spike was computer generated as it corresponded with Black Friday as well.  The spike back up, still has a small gap in it which should still get closed off.

This spike does “not” show up when I switch to a line type of a chart. Technically speaking the VIX would still have to drop to the $9.00 price level before all the gaps are closed off.

There are a few gaps still open well above todays prices so these open gaps work like a magnet, drawing prices to them.

That $8.60 bottom represents a huge VIX bear trap, which is the opposite to the SP500 bull trap!

VIX Intraday Gap Review.

The VIX cash contract has been heading down again, with a certain urgency to it.   Once we have a good look we can see that there are a few gaps that can throw a monkey wrench into the bullish and bearish scenarios of the VIX.   The first gap down at the bottom is still open, while we also have two gaps still open above present prices. Which set of open gaps is going to get closed off first? 

We can see a huge single spike to the upside, which can remain as the spike to beat, but it may get matched with an equally long spike to the downside.  I would love to see the opening gap in November get closed off, before the then next rally of fear,  starts to take off again.  Even if it doesn’t get closed off  we could get a H&S type setup as well. 

We also have a big open gap at the $23 price level so long term, any bullish run with the VIX, means a bearish run in stocks. 

VIX Intraday Bullish Phase Update

The VIX has been reacting like it should, which is a visual representation of fear in the market place. Many don’t care about the VIX  as they think the lower it goes the higher the bull market will go.  It also means that more and more investors were caught in a VIX bear trap.  All gaps below have been closed off, and one big gap in early September has now been closed off as well.   Since today was a very steep rally we should expect a correction, but not break new record lows again. 

VIX Intraday Review: Gaps Closed!

The bullish move of the VIX in October has now reversed, and looks like it may still go lower. Any inverted zigzag can completely retrace itself, except if it’s starting a set of 5 diagonal bullish waves.  Stocks are starting to correct again as I post, so this could give the VIX a little kick. We need a big bullish move with the VIX, to give investors a wake up call.  Of course most investors don’t care about any VIX, as all they care about is that markets keep going up. 

The commercials are still net long, so until those positions reverse, the threat of the VIX eventually heading back up is real. The big open gap we did have, has now been closed, so any gap to the downside would be a welcome sign.  Even a spike to a new record low would also be very bullish for the VIX. 

Mini SP500 Intraday Crash Update With VIX Commentary

Finally, The markets have reacted to the October, 19, 1987 stock market crash. It’s not any yearly anniversary date that the markets might react to,  but it’s the 30 year anniversary date that is the important time period. 

We do need more evidence that this decline has more downside legs to go, as any initial reaction can be still part of the bullish cycle. It is important that I find the last bullish wave otherwise, any wave count will have little meaning. Since the initial decline was rather steep, we could be looking at the start of,  diagonal wave structure as well. 

The spike to the upside is not a good bullish signal, but the markets are still struggling trying to head back up. Any analyst can give us support price forecasts, but when they do, they think they are just in another correction. The only real support we will find is the final one of a bear market low, as all others will just be temporary stops. 

That’s not going to happen anytime soon, if a potential Cycle degree peak has just completed. I’m looking for the top that will hold, as these record breaking highs may have come to an end.  Until this market is firmly controlled by bears, the risk of another bull attack are always present. 

The VIX has also soared, but created a few open gaps as it surged.

This VIX cash chart is very different from any November or December contracts. So far we have the potential for a zigzag to be completed, but that can always be the start of a diagonal set of waves as well.

VIX Intraday Crash Update.

The big open gap has been closed off and the VIX continues to head back down.  We could end up with a big double bottom and a H&S type of a setup. 

In the next two weeks we could run into some volatility with the 1987 stock market crash anniversary date next week.  Most trading was done in the pits at that time and the system got overwhelmed with sell orders. There are many more safeguards in the markets today, where they will halt trading first. 

The VIX does not have to create a new record low, but we can’t rule out anything in the short term.

VIX Intraday Rally Review

The VIX has been on a bit of a rally, but a wide open gap formed on the way up. I call this more like a Scalene triangle with an open end. Pattern wise it could be a diagonal 5th wave, but if this is the case, then the VIX should see yet another record low.  I would love to see this gap closed before the VIX pushes higher, but there is never any guarantee that this bottom gap will get close anytime soon. 

There is one big open gap above present prices, which will get closed, but it also could produce unexpected resistance. In early October there were many gaps that opened up,  which now have been closed. Even when they are already closed off, they can supply a strong support price range. 

The VIX has been rolling around record lows just like stocks have been rolling around record highs, so in that respect there is good inverse synchronicity. 

VIX Intraday Update: The Attack Of The Algorithms

Even with the VIX we see that algorithms were in control at one time, but it is starting to look like the human VIX traders  are starting to break free again. There is no real way of proving that these tight wave formations are computer generated, but no human or groups of humans can trade this fast and within a very tight price range. 

The VIX did drop down a bit lower to the $9.11 price level before it violently moved back to the upside. All bottom gaps are now filled with two gaps open well above present prices. The COT reports are not updated until the end of the trading day, so I quickly scan them to look for ratios that are out of wack or very distorted. My bet is that Commercials added long contracts this week while the speculators  added to their short positions.  Both groups can’t win as one group would be in a bear trap and the other would be a bull trap. 

As much as this start to a bullish phase can turn out to be nothing, as stocks may yet prove to still have life in them. 

VIX Intraday Record Low Update

This morning the VIX imploded setting yet another record low in the last few months. Will this be enough before the VIX starts on a bullish run? On this intraday scale, there are two gaps still open above present prices, which must get closed off. How long that will take is always uncertain, but the big gap good give  the VIX a realistic price level to struggle with.

Last weeks COT report had the commercials at a net long position by a wide margin. This Friday they may add to their bullish positions, which is what I would like to see. The little arrow I show is the start of a potential bullish phase, which bottomed at the 9.13 price level this morning.

All the indices have gone nuts this morning with virtually all indices that I cover,  pushing to new highs. Just like there is a potential for a VIX bear trap, the reverse would be a bull trap in the 5 indices I watch. 

Indices don’t stop on a dime, but they do create blow-off situations where they do look like they stopped on a dime. It’s like trying to stop a speeding semi on the freeway, and forcing a complete reversal. 

For now the new VIX bottom has to hold, but if other gaps open on the way up, all bullish bets could be temporarily derailed again.   

VIX Intraday Gaps Update.

The VIX reacted this morning, but at the same time left a couple of huge open gaps that eventually must get closed off. I would like to see them get closed off sooner than later, as this is pretty early in the game to allow these gaps to remain open.  The 9.30 price level is also another double bottom record low going back to 1993.  Since the 1993 bottom we have three big VIX bottoms around the $10 price level, so this makes for a potential strong base.

A 24 year tripple bottom is pretty bullish for the VIX in my books, but that doesn’t mean a major reversal is due today. Longer term I’m bullish on the VIX, but with gaps showing up and VIX bullish run can get delayed.

VIX Intraday Record Low Update

This morning the VIX created another low after which the VIX started to move up again. End of the month and the end of another quarter shows how complacent investors really are. When the stock bulls are so complacent, then the attack of the stock bears is not far away. This will inject fear back into the markets again.  There is a big gap open above present VIX price levels, works like a magnet attracting  prices to the gap. 

At a minimum it would be nice for the gap to get closed off, but a new gap on the way up can reverse the VIX just as fast. At $12.60 we have several resistance levels that the VIX would also have to contend with.  October can be one of the most volatile months out of the year, with the 30 year anniversary date of the 1987 stock market crash due as well.   

Even though the markets have been pushing to new record highs, I have to remain bearish on stocks until the public gets very bearish on stocks again. 

E-Mini SP500 Intraday New World Record High

This morning the SP500 pushed to a new record high of 2513. End of the month and the end of another quarter,  could convince traders to take a “profit”. I must admit that the wave count has been pushed a bit more than I like, but until something better shows up, I have to use what the market has dealt us.  

The VIX has also plunged to a new low, with a double bottom at the 9.50 price level. The VIX has a huge open gap above its present price and this gap was created about the same time as the Mini SP500 gap still open above.  The DOW also has an open gap below, so its not just about one asset class. All these open gaps going in both directions will get filled, as we are approaching one of the most volatile months out of the year.  When there are too many open gaps around, it makes for a rather flimsy base to build more legs up. 

I’m still looking for a home to Cycle degree wave 3, and if this is correct, then the SP500 should still drop below the 1800 price level. 1800 would only be an Intermediate degree correction, and the 1500 price level would be the minimum where it enters the previous 4th wave of Primary degree. 

We still have several years for this to all play out, but when we get close to solar cycle reversal time, then all bearish bets are off the table. 

VIX Intraday Update

The VIX has been grinding downward for most of September, but it has made another turning just yesterday. How far that will take us is still a guess, but that big open gap may give us a short term resistance price level.  Another price level gap is at $23, but we should see several corrections before the VIX ever gets to $23. There is lots of room for the VIX to move up which means there is lots of room for stocks to move down.

Since last week the VIX COT report with commercial traders positions is still on the side of the bulls. It will take a long time for this scenario to reverse, but when it does, then a strong stock counter rally would ensue.

Intraday VIX Crash Update.

Gaps have opened up many times since the August peak, but have been mostly closed off. Two big gaps are remaining that I would like to see get closed, with the bottom gap being the first to close,  followed by closing off the $12 gap. Investors are having a tough time becoming completely complacent. Any bad news in this stage of the game,  can send investors into a mini panic. 

A worst case scenario could send the VIX to new record lows, as the August decline could work as a set of declining diagonal waves. Any new low in the VIX, could drop like a rock or the speed of a flash crash, before it starts to crank up again. 

Up near the $23 price level, we still have a partially open gap, which makes for a great price target in the future. Commercials are heavy net long, with a 2.5:1 ratio, while the speculators are net short with a 1.68:1 ratio. Between the two groups somebody is wrong, and my bet is not on the speculators being right. They are flogging a dead horse, or should I say “flogging a dead bear”,  thinking that the VIX still has a long way to go down. 

VIX Intraday Gyrations Update

One thing we will always get are wild swings in both directions, which forces many of the simple impulse waves to overlap at critical points. The only way we have a chance to wave count the VIX, is to make sure we count the waves all as diagonal waves with only small runs of simple impulse waves. VIX is one world where diagonal waves rule with no exceptions.

Silver is another one of those diagonal asset classes which has persisted since the 1993 silver bottom. The above chart looks like another zigzag is forming, but a bit more downside can still happen. The VIX can hit $10 which takes us close to the previous bullish phase bottom. 

My starting Minute degree level may be a bit too high, but this can be adjusted on the fly if need be. In this case we should not see a new record low before the VIX cranks up again. 

Next Thursday will be the end of the month and several jobs reports will also come out by Friday. This could make for some wild moves so we should always keep that in mind. 

There is one small open gap above todays prices, so this will be the first price target that should get hit again. Many analysts got a real thrill when the VIX jumped 30% in one day, but that may not happen again for some time. Maybe it will jump 50-60% instead.  😉   Of course that may also be wishful thinking on my part. 

We have one small open gap at the $23 price level so that would be the next big price target I would like to see get hit! 

This may happen this year or even closer to the 1987, 30 year anniversary date.  Years ending with a 7 have been disasters for the stock markets in the past, so this year could also bring us some surprising results. 

SP500 Intraday Gyrations Review

The markets haven’t pushed to a new record high since August, 8th. The markets need another shot of adrenaline or some magic herb as there is nothing to fuel the addiction. Maybe the markets need a jolt of electricity like a cattle prod,  to get this market soaring again.  We have some wild overlapping wave structures which just don’t fit into any nice impulse wave. I have to keep the bull market alive with bullish wave counts, until that Eclipse bottom is completely retraced.

Even then it may still be a bit too early to call the bull market dead. The VIX is making a triple bottom, which may not hold until the VIX also breaks this triple bottom support. 

Other indices like the Midcaps have jumped the gun at the start of this bear race, and pose no real threat for a sustained bull attack. It still leaves a few other indices in undecided patterns which can still break into a new record high. 

I dislike it when the markets are still this undecided, but that is what we’re being dealt and all we can do is track the small moves until they fit better into the bigger moves. The excitement of the solar eclipse has now come and gone and it may take until 2024 before the next eclipse happens.  Any eclipse has a minor effect on the markets, as the big flip of the sun’s north and south poles will have a much bigger impact than we can possibly imagine. 2008-2009 is a prime example, as solar cycle #24 gave us an 8 year bull market. 

Any time the markets head down, we will get the standard, “Doom and Gloom” forecasts. We have been getting climate related end of the world forecasts, but the markets have not reacted in a bearish nature to all this doom and gloom reporting.

Markets don’t care about runaway global warming” or if the world is going to self-combust, due to CO2.  I think the world needs to take a big pill to combat climate change paranoia. 


VIX Intraday Rally Update

It seems that the VIX bear trap has now come and gone, so the next thing we would have to look for is a VIX bull trap. The decline sure looked like an impulse which means that a potential “B” wave VIX bull trap can still happen. All gaps below have been closed, with one big gap only about 50 cents away from being filled at $15.50.  A fake “B” wave run could send the VIX right back down, even to the point that a new record low can be achieved.

Stocks would have to make a violent comeback for the VIX bearish scenario to play out.

Wall Street’s ‘fear gauge’–the VIX–jumps 24% amid tumbling Dow, Barcelona terror attack – MarketWatch

There are plenty of fundamental reasons that the majority of analysts uses to justify the market decline, with most of them just “parroting” another analyst’s opinion. Fundamentals which analysts get from the news is a lagging indicator at best. They ignore the fact that the markets have seen record bullish highs, which has created an extreme overbought situation. 

Technically speaking, eventually the VIX should match or surpass the 2008 peak of the VIX. It may take 3-4 years to get there, which still seems a long way off.

When we start getting open gaps as the VIX soars, then we have to be aware that the VIX can crash right back down and close a few of these potential gaps.