VIX - Back to the elevated volatility

On 3rd August 2022, we set a medium-term price target for VIX at 30 USD. Then a week later, we updated this price target to short-term. Our view derives from the premise that the stock market ceased its bear market rally and will continue to drift lower. Technical indicators indicate intense selling pressure across major U.S. stock market indices over the short term. At the same time, bearish fundamental factors are due to persist for much longer, over the medium and long term. These factors will drive the global economy into a deeper recession toward the end of the year, causing a risk-off sentiment accompanied by elevated volatility. Therefore, we have no reason to change our assessment. Accordingly, we stick to the 30 USD price target.

Illustration 1.01

The picture shows a bullish breakout above the sloping resistance, shortly followed by an opening gap. These developments are very bullish for VIX.

Illustration 1.02

Illustration 1.02 shows the top of the bear market rally and correlation among U.S. stock market indices.

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DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.

Trade closed: target reached:

Our short-term price target of 30 USD was reached.