VIX at the daily view.
The VIX is stair stepping as it's been in a RSI uptrend for a month now. VVIX is still above 105 so volatility is here to stay. Since the selloffs have been low in volume and not spiking down, the VIX hasn't been spiking as much. In addition, VIX futures have been experiencing backwardation from the contracts rolling over. There was already more volatility expected in September, October, and November due to the election cycle. So, the spikes may not be as big as they were in June.
Translation: VIX spikes up more from unexpected volatility spikes. That's what makes it volatile - the unexpected movements.
Many new traders (VIX trading wannabes) think the VIX is purely an inverse index. That is exactly how the VIX eats new traders up. They don't understand that VIX is not a self-contained index. It's part of an "ecosystem." You have to understand the VIX, VVIX (its internal engine), VXN (NQ's VIX), put/call ratio, liquidity levels, and the ES all at once. That's why there are very few actual VIX traders.
Judging by the weaker liquidity levels, VIX will stay elevated for a while. However, the backwardation will leave profits very disappointing.
That said, my plan is to short the bounces on ES when the VIX is about to reach support levels.
The VIX is stair stepping as it's been in a RSI uptrend for a month now. VVIX is still above 105 so volatility is here to stay. Since the selloffs have been low in volume and not spiking down, the VIX hasn't been spiking as much. In addition, VIX futures have been experiencing backwardation from the contracts rolling over. There was already more volatility expected in September, October, and November due to the election cycle. So, the spikes may not be as big as they were in June.
Translation: VIX spikes up more from unexpected volatility spikes. That's what makes it volatile - the unexpected movements.
Many new traders (VIX trading wannabes) think the VIX is purely an inverse index. That is exactly how the VIX eats new traders up. They don't understand that VIX is not a self-contained index. It's part of an "ecosystem." You have to understand the VIX, VVIX (its internal engine), VXN (NQ's VIX), put/call ratio, liquidity levels, and the ES all at once. That's why there are very few actual VIX traders.
Judging by the weaker liquidity levels, VIX will stay elevated for a while. However, the backwardation will leave profits very disappointing.
That said, my plan is to short the bounces on ES when the VIX is about to reach support levels.