Market Analysis

Sniping the $VIX

Post by Mella:

Little limp dick $VIX (as i call it) and its inability to get up and stay up has been apparent for many years but more so since Trump came into power.

For me $VIX has always been key and one needs to constantly respect it. The trend has been firmly down. However, once in a while, it throws a little fit but usually if you follow indictors and price patterns correctly you are able to spot its reversal zones quite accurately.

The compression since the US elections on the $VIX has also been apparent and we’ve seen record short positioning data to go with that trend when finally last week we saw the old man $VIX get aroused.

Is this another fit here or something bigger? The global indices reached moon status with zero sniff of a retrace during the last 20 months. And why not, MAGA was out in full force!

I’m not here to make any big calls, been there, done that. Failed!!! It’s all about technical set ups here and utilising what charts are doing and trying to capitalise with a good trade.

Patterns form, price rules and a jigsaw is created and one needs to put it all together.

$VIX has helped greatly despite being a useless indicator for many. Spotting patterns here are key, after all $VIX is mainly a protection tool.

Below is an example of how well $VIX actually adheres to technical analysis:

Nice bull flag spot and potential inverse on Jan 22

Pattern held nicely:

Confirmation was key here also on its indicators:

On the 31st Jan $VIX formed another bull flag with further indicators backing it up and the rest is history.

Then we reached the $VIX 17 target last Friday:

And as a result of the $VIX we saw this:

So what now with this limp you know what?

Well $VIX monthly is telling us a different story. Macd bull cross after positively diverging for some time and we now have a fairly powerful monthly candle.

For years $VIX has journeyed via its daily chart. Is this time different? Will the monthly $VIX finally take off? Only patience and understanding of price and patterns will tell us that. For now at least the old man $VIX is happy again!

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