VIX Breathing Life Again? 8/23/2020
The VIX has been "dancing" for nearly 5 weeks now. That's when the VIX makes a weekly jump that keeps the VVIX above 105-110. The point is to buy enough time for the liquidity to decrease.
Right now, the VIX is doing three things that caught my eye.
1) The VIX jumps every week just high enough for the VVIX to close above 105-110. The VVIX acts the implied volatility for the VIX. Whereas, the VIX is the face value of the expected move, the VVIX implies the volatility in the future. Currently, there is a bullish divergence between the VIX and VVIX.
2) The VIX established an uptrend support on the RSI at the daily view... for now. I think that hasn't happened since June.
3) The VIX's is making a lower low, but the daily RSI is making a higher low.
What does this mean? The VIX is up to something. The VVIX refuses to close below 105 for more than a month now. It will probably take a couple more weeks for the VIX to start showing its hand. However, since the sentiment of the market is getting pretty bullish, I'll be paying attention to the VIX and VVIX.
It's a basic principle of market psychology as Warren Buffett explains it. "Be fearful when others are greedy, and greedy when others are fearful."
Right now, the VIX is doing three things that caught my eye.
1) The VIX jumps every week just high enough for the VVIX to close above 105-110. The VVIX acts the implied volatility for the VIX. Whereas, the VIX is the face value of the expected move, the VVIX implies the volatility in the future. Currently, there is a bullish divergence between the VIX and VVIX.
2) The VIX established an uptrend support on the RSI at the daily view... for now. I think that hasn't happened since June.
3) The VIX's is making a lower low, but the daily RSI is making a higher low.
What does this mean? The VIX is up to something. The VVIX refuses to close below 105 for more than a month now. It will probably take a couple more weeks for the VIX to start showing its hand. However, since the sentiment of the market is getting pretty bullish, I'll be paying attention to the VIX and VVIX.
It's a basic principle of market psychology as Warren Buffett explains it. "Be fearful when others are greedy, and greedy when others are fearful."
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