VX Falling Wedges

The volatility crush we have seen lately isn't quite like anything I've seen before. The market is in risk on mode and has been all year. VX is sitting at all time lows at the moment, but has recently broken out above a falling wedge, and then another after that. Each breakout has been short lived and VX tends to always collapse shortly after any rallies in this market. Negative data is shrugged off immediately and any dips are bought.

This is the major pattern and until it changes, shorts are not going to work. This is the third wedge in a row which is why I decided to post this idea because I find it interesting. We have a potential catalyst tomorrow as well, but it appears the market is not worried about it and usually that means nothing bad will happen. However, if PCE does come in unexpectedly hot while VX is at all time lows and no one is hedged, it could be catastrophic. I don't have any expectations for now, just waiting to see.

VX will be key in determining if any sell offs that occur have legs or not. If it breaks above this wedge and takes out previous highs I'd say look out below. Otherwise, we may just keep rallying all summer long, which is typical for July and August.