Volatility Jump Delayed (VIX) 8/6/2020
It seems that liquidity is winning the battle so far. According to the internal market data, these are the highest levels of liquidity since January 2020. Due to this high liquidity, it's drowning the VIX.
That doesn't mean pullbacks are completely eliminated. The VVIX has yet to close more than a day below 105. So, there is a possibility that the VIX is playing possum.
This morning, the algorithms did another support test and it went another level lower. That tells me that the supports are now found lower in the VIX and will likely head lower.
As a result, there will likely be no decent pullback this week at all. The ES is currently in an ascending wedge at the daily scale and it reaching the end soon.
The last time that the VIX played possum like this was when we had that blowoff top pattern back in early June. The ES is in an ascending wedge. for more than 7 trading days now.
This could mean that the ES may get another blowoff top pattern. Now, is it THE top? Most likely not. I'm a swing trader. I only worry about the next 1-2 weeks.
The lowered supports means that the projected volatility jump just got delayed due to this new action in the VIX. I'm not expecting a volatility jump until middle of next week.
Until then, I'm just going to chill with my kid and just trade commodities. If I miss the volatility jump, oh well. Permabears and permabulls tend to think that opportunity is only in one direction. Veteran traders don't care which direction they make money from. If I miss this volatility jump, what's the next opportunity? A very nice long entry in gold, silver, or equities.
That doesn't mean pullbacks are completely eliminated. The VVIX has yet to close more than a day below 105. So, there is a possibility that the VIX is playing possum.
This morning, the algorithms did another support test and it went another level lower. That tells me that the supports are now found lower in the VIX and will likely head lower.
As a result, there will likely be no decent pullback this week at all. The ES is currently in an ascending wedge at the daily scale and it reaching the end soon.
The last time that the VIX played possum like this was when we had that blowoff top pattern back in early June. The ES is in an ascending wedge. for more than 7 trading days now.
This could mean that the ES may get another blowoff top pattern. Now, is it THE top? Most likely not. I'm a swing trader. I only worry about the next 1-2 weeks.
The lowered supports means that the projected volatility jump just got delayed due to this new action in the VIX. I'm not expecting a volatility jump until middle of next week.
Until then, I'm just going to chill with my kid and just trade commodities. If I miss the volatility jump, oh well. Permabears and permabulls tend to think that opportunity is only in one direction. Veteran traders don't care which direction they make money from. If I miss this volatility jump, what's the next opportunity? A very nice long entry in gold, silver, or equities.
כתב ויתור
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