VIX at the daily view.
I know it's been a while since I posted. I've been dealing with some personal issues lately that require my attention more.
The VIX bounced off both trend line and RSI support which caused a small jump. The VIX is starting to get near the end of the bigger wedge resistance (plain blue line). I have that jump projected around October 14-16. That said, The VXX is projecting a spike around October 8-9. I wish Trading View would have the VIX futures fully available so I can actually do a full analysis of it. UVXY is based off the VIX futures anyways. Currently, I'm using, the spot VIX, VVIX, and VXX to pin point these volatility jumps.
Currently, I am staying away from longing the VIX until at least December. As stated before, the VIX is going through backwardation. That's when the futures' price is higher than the actual asset. So, you're actually paying a hefty premium to long the VIX. The safer trade is most likely shorting the VIX until the premium returns to relatively normal.
New traders keep thinking the VIX is broken. That's user error. The VIX is working fine. You just have to be aware of contango and backdwardation. June had some serious contango so that's why the VIX profits so much. Due to higher expected volatility, I don't think we will be seeing the VIX at 20 for a while. We will most likely hang around the mid-20s to the low 30s for a while. However, with VVIX closing below 105, the VIX's swings will be smaller as time goes on until that wedge resistance breaks.
What's concerning to me is that the VVIX has been closing below 105. That could possibly mean that longer-term volatility may be settling down after election season.
I know it's been a while since I posted. I've been dealing with some personal issues lately that require my attention more.
The VIX bounced off both trend line and RSI support which caused a small jump. The VIX is starting to get near the end of the bigger wedge resistance (plain blue line). I have that jump projected around October 14-16. That said, The VXX is projecting a spike around October 8-9. I wish Trading View would have the VIX futures fully available so I can actually do a full analysis of it. UVXY is based off the VIX futures anyways. Currently, I'm using, the spot VIX, VVIX, and VXX to pin point these volatility jumps.
Currently, I am staying away from longing the VIX until at least December. As stated before, the VIX is going through backwardation. That's when the futures' price is higher than the actual asset. So, you're actually paying a hefty premium to long the VIX. The safer trade is most likely shorting the VIX until the premium returns to relatively normal.
New traders keep thinking the VIX is broken. That's user error. The VIX is working fine. You just have to be aware of contango and backdwardation. June had some serious contango so that's why the VIX profits so much. Due to higher expected volatility, I don't think we will be seeing the VIX at 20 for a while. We will most likely hang around the mid-20s to the low 30s for a while. However, with VVIX closing below 105, the VIX's swings will be smaller as time goes on until that wedge resistance breaks.
What's concerning to me is that the VVIX has been closing below 105. That could possibly mean that longer-term volatility may be settling down after election season.