1. As can be seen VIX has once again formed a bullish wedge which is ready to breakout in the very near future
2. Another way to look at this is by combining the 2 wedges which is forming a triangle ( see attached line chart). This is also showing signs of a breakout.
3. 50d SMA for the PUT/ CALL ratio is at EXTREME lows; last seen in 2009 ! This is reflecting extreme complacency and it can almost never end well; a sharp correction is a given (see chart below)
4. What would the catalyst be ? who knows... could be the FED meeting or something random that the market will conveniently choose to react to
@AlgoHunter of course anything is possible. Until 23 isn’t violated I’m holding this position
DaddySawbucks
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Confusing; you bought a bull call spread? You mean Long on VIX? With P/C ratio at lows that would make sense.
Nocturne83
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@DaddySawbucks, Yeah, confusing, wouldn't you buy a put on the indecies with the VIX being bullish?
markethunter888
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@DaddySawbucks yes that’s what I meant. Bull call spread on VIX.
markethunter888
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@Nocturne83 Instead of buying puts on the index I’ve bought a bull call spread on VIX.
Nocturne83
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@r3anand, OK, makes sense :)
bearbones10
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@r3anand, i've been watching this pattern form for the last 2 months. I believe we have a correction coming that brings the s&p down to the 1850 area if the trendlines out at 1 month hold