VIX at the 4 hour view.
The VIX had another short-lived volatility jump as expected. It confirmed a new wedge as a result.
The volatility jump was short-lived due to the high liquidity according to the market's internal data. The high liquidity just drowned the VIX's potential jump.
Currently, the VIX is doing the "volatility dance." That's when the VIX makes several small jumps to build up for a bigger run. If you look at the cash hours, they're forming slightly higher lows. Of course, timing is key. The VIX has to continue this "dance" until the high liquidity actually weakens. That takes time to get there.
So, this battle is between the VIX and the liquidity cycle. Which will win? It's a battle of attrition at this point.
The reason why I do not think the VIX is done is because the VVIX is still above 110 and has yet to close several days below 105. Furthermore, liquidity cycles last 4-8 weeks before a break in between.
It looks like this wedge may break again approximately 8/5 to 8/7. I doubt liquidity would decrease that fast, so it might just be a short-term pullback. I would not be shorting for a while until the internal data is on my side for that.
Disclaimer: Do not treat the VIX like a regular index. Many tried to trade the VIX like the S&P or a stock. That's why many people failed to trade the VIX. Do not trade with something that you don't understand.
The VIX had another short-lived volatility jump as expected. It confirmed a new wedge as a result.
The volatility jump was short-lived due to the high liquidity according to the market's internal data. The high liquidity just drowned the VIX's potential jump.
Currently, the VIX is doing the "volatility dance." That's when the VIX makes several small jumps to build up for a bigger run. If you look at the cash hours, they're forming slightly higher lows. Of course, timing is key. The VIX has to continue this "dance" until the high liquidity actually weakens. That takes time to get there.
So, this battle is between the VIX and the liquidity cycle. Which will win? It's a battle of attrition at this point.
The reason why I do not think the VIX is done is because the VVIX is still above 110 and has yet to close several days below 105. Furthermore, liquidity cycles last 4-8 weeks before a break in between.
It looks like this wedge may break again approximately 8/5 to 8/7. I doubt liquidity would decrease that fast, so it might just be a short-term pullback. I would not be shorting for a while until the internal data is on my side for that.
Disclaimer: Do not treat the VIX like a regular index. Many tried to trade the VIX like the S&P or a stock. That's why many people failed to trade the VIX. Do not trade with something that you don't understand.