The Parable of the Prodigal VIX 9/3/2020
VIX at the daily.
Whelp, I was wrong. I totally thought that the VIX spike would be September 10th or 17th (+/- 1day). I mentioned that the VIX had a bullish divergence at the RSI, a bullish divergence with the VVIX, an uptrend in the RSI, and multiple higher lows in a row.
Those were my clues that the VIX was about to burst soon. I didn't think it would be this soon. I did scale in some UVXY when I saw the 3rd higher low in a row. It was a small position, however. I wished I listened to my gut instinct this time and went big on the VIX. Why did I do it? It was due to all of the bullish evidence above plus the Put/Call Ratio was consistently below 0.75. There were so many calls in the tech sector that the VIX recognized it as a buying climax.
The VIX closed above my original channel which the top was about 32. When I saw the VIX close above it, that was my sign saying that there is more volatility tomorrow.
I'm waiting for the ES to get to a major support so I can short the VIX. That's actually the easier trade for the VIX. It's way easier to react to a volatility spike than to anticipate one.
VIX will need to close above 36 in order to keep the momentum going.
Whelp, I was wrong. I totally thought that the VIX spike would be September 10th or 17th (+/- 1day). I mentioned that the VIX had a bullish divergence at the RSI, a bullish divergence with the VVIX, an uptrend in the RSI, and multiple higher lows in a row.
Those were my clues that the VIX was about to burst soon. I didn't think it would be this soon. I did scale in some UVXY when I saw the 3rd higher low in a row. It was a small position, however. I wished I listened to my gut instinct this time and went big on the VIX. Why did I do it? It was due to all of the bullish evidence above plus the Put/Call Ratio was consistently below 0.75. There were so many calls in the tech sector that the VIX recognized it as a buying climax.
The VIX closed above my original channel which the top was about 32. When I saw the VIX close above it, that was my sign saying that there is more volatility tomorrow.
I'm waiting for the ES to get to a major support so I can short the VIX. That's actually the easier trade for the VIX. It's way easier to react to a volatility spike than to anticipate one.
VIX will need to close above 36 in order to keep the momentum going.
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