Let's take a look at the Vix with a Heikin Ashi candlestick, and on a log scale. Notice the RSI on the monthly timeframe is 43, after hitting a similar RSI high in March 2020 (80) to that of Nov 2008, when the RSI was around 80 as well. The post November crash RSI low in the Great Recession crash was around 40, and we're at 43 now on the bounce. In 2010, abruptly following the 40 RSI test, we saw the RSI rise back toward 55, taking the Vix from a low of 15.20 to a 48 handle in a matter of weeks. Here we are, after the Major crash of 2020, and Vix is back at a 16 handle, with an RSI of 43. What might happen next if we see a notable correction, is an overcorrection, which could easily take Vix back to 48 based on previous market behaviour and sentiment, post crash. I don't see Vix having more than a 1 point downside at this stage, so I may consider increasing my position yet again, in anticipation of a large spike back to the 40's as early as this month. Thoughts and ideas welcome.
I think we're headed for a large vix spike within a month or so (hard to time these things obviously - see my previous ideas) and I think the target of the 40's is conservative.
Keep up the good work!
Hedge_Of_The_World
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@Addicted2vtec Thank you, my friend! I think we’re definitely overdue for a correction across the risk spectrum. Last time we saw a small 3% dip, Vix rose 61%. I think 40’s is conservative, but I’m not trying to be greedy. I’ll be happy to take profits at 44. 😎
akatsiya
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Vvix seem to be in uptrend
ProfitHarvest
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Sell power still holding pretty strong...
Hedge_Of_The_World
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@ProfitHarvest For sure buddy, it’s ugly right now. We’ve been in a 1 point range for too long, though. Time for the Vix to release some pressure, finally.
InnerMotionTrading
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Cool analysis. What are you using for a VIX position and why do you like using the Log scale?
Hedge_Of_The_World
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@InnerMotionTrading Hey, thanks for the comment! I use a few different instruments including uvxy, and huv. The log scale is useful to get a more evenly distributed set of data. It helps remove a lot of the noise, and from a visual perspective, it helps benchmark the magnitude of a move, with out the skew of the potentially wide price range.
Keep up the good work!