What you’re looking at is the daily chart of the VIX compressing inside a large multi-year symmetrical triangle. Since the 2020 spike, volatility has been making progressively lower highs while also holding a rising base of higher lows. That compression tells us one thing: energy is building.
Each major spike (2022, 2023, 2024, 2025) has been sold into lower highs, but notice something important — the selloffs are losing downside momentum. We now have a potential triple bottom structure forming along the rising support trendline (Bottom 1, Bottom 2, Bottom 3 on the chart).
Why this matters:
Volatility cycles between contraction and expansion.
Long periods of compression (like this triangle) typically resolve with expansionary moves.
The tighter the range, the more violent the eventual breakout tends to be.
The VIX is currently holding above its structural floor while starting to push higher.
In my view, we are transitioning from the “volatility suppression” phase into the early stages of a volatility expansion phase.
The key level to watch is the descending trendline resistance from the 2022 high. A confirmed breakout above that level would signal a regime shift — from contained volatility to accelerating volatility.
If that happens, measured move targets from this triangle project significantly higher levels (see target zones on the chart). Historically, VIX breakouts from compression structures don’t grind — they spike.
My Positioning
Because volatility expansion tends to be sharp and nonlinear, I am positioning via call options on the VIX (or volatility-linked instruments) rather than waiting for confirmation. Options provide asymmetric upside if the expansion accelerates.
Risk is defined:
If VIX breaks down below the rising support and loses the triple-bottom structure, the thesis is invalidated.
Time decay is a factor, so expiration selection matters.
What I Expect Next
Base case:
Continued higher lows.
Attempted breakout through descending resistance.
Acceleration toward the mid-range of the triangle first, then potentially a larger expansion move.
This is not a prediction of immediate market collapse — it’s a structural setup suggesting the next volatility regime shift may be higher.
When volatility is cheap and compressed, it’s often when you want to start thinking about owning it — not chasing it after the spike.
Each major spike (2022, 2023, 2024, 2025) has been sold into lower highs, but notice something important — the selloffs are losing downside momentum. We now have a potential triple bottom structure forming along the rising support trendline (Bottom 1, Bottom 2, Bottom 3 on the chart).
Why this matters:
Volatility cycles between contraction and expansion.
Long periods of compression (like this triangle) typically resolve with expansionary moves.
The tighter the range, the more violent the eventual breakout tends to be.
The VIX is currently holding above its structural floor while starting to push higher.
In my view, we are transitioning from the “volatility suppression” phase into the early stages of a volatility expansion phase.
The key level to watch is the descending trendline resistance from the 2022 high. A confirmed breakout above that level would signal a regime shift — from contained volatility to accelerating volatility.
If that happens, measured move targets from this triangle project significantly higher levels (see target zones on the chart). Historically, VIX breakouts from compression structures don’t grind — they spike.
My Positioning
Because volatility expansion tends to be sharp and nonlinear, I am positioning via call options on the VIX (or volatility-linked instruments) rather than waiting for confirmation. Options provide asymmetric upside if the expansion accelerates.
Risk is defined:
If VIX breaks down below the rising support and loses the triple-bottom structure, the thesis is invalidated.
Time decay is a factor, so expiration selection matters.
What I Expect Next
Base case:
Continued higher lows.
Attempted breakout through descending resistance.
Acceleration toward the mid-range of the triangle first, then potentially a larger expansion move.
This is not a prediction of immediate market collapse — it’s a structural setup suggesting the next volatility regime shift may be higher.
When volatility is cheap and compressed, it’s often when you want to start thinking about owning it — not chasing it after the spike.
I develop professional Pine Script indicators and strategies for traders. All my indicators and strategies have invite-only access.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
I develop professional Pine Script indicators and strategies for traders. All my indicators and strategies have invite-only access.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.