Judging by this 60 min chart of the VIX, it looks like this chart is consolidating and is getting ready to bust to the upside. I wouldn’t be surprised to see a major drop on Monday with this breaking out above the $47 level if this bullish pattern plays out. The fact that the RSI was able to stay above 30 is reminding us how volatile of an environment we’re in. I’m not calling for a fall, it’s just that recent when things look like they are starting to turn around the market falls apart…fooling the majority of investors and leaving them frustrated.

100% cash going into the weekend and thankful for it.

Happy Thanksgiving to those of you in Canada.



13 Responses to “The Volatility Trade”

  1. Steve Says:

    Hey Jeff,

    I have to agree, especially with the continuing sovereign issues resonating out of Europe. Each week seems to bring out new banking issues from one or more countries. The indexes were weak going into the close so I also expect a down day on Monday in the U.S. followed by the same on the TSX on Tuesday. TSX looked like it formed a dark cloud cover candlestick today…look out!

  2. Steve Says:

    Oh, Happy Thanksgiving on Monday to you and yours. How are those Vikings doing? (lol).

  3. jeff pierce Says:

    I’m so indifferent to football and as detached from the vikes as I have been in awhile. already looking to next year and refuse to watch until Mcnabb is benched.

  4. sam Says:

    i bought puts today based on the vix and the 200 day ma. It has not been below it for several months and was ‘sitting’ right on it. Would of made a bundle if not for the last move in the markets up however was fortunate with the move back down in the last 30 minutes. i cashed out with 20 seconds left in the market.

  5. sam Says:

    Edit: 50 day moving avg, not 200 day. My aplogies for the error.

  6. Steve Says:

    Recommendation: get a new team. Either that or hope for a reincarnation of Bud Grant.

  7. jeff pierce Says:

    I’ve been w/ them for 26 years. It’ll make it that much sweeter when we do win a super bowl.

    I’ll root for the Lions this yr….they deserve it.

  8. Richard Says:

    Sold Soyabeans at the low end of the range. At least it seems to ranging out.
    Still it checked back so exited with a zero loss . Choppy.
    Wondering if the bulls are still in control with the stocks .

  9. frank Says:

    all i have done for years is trade vix futures…to run 40’s vix you are expecting 4% moves..if these do not show up soon…37 vix is gonna blast through 30 soon enough. my bet is we settle in 30 to 33 range for a while if eurozone continue’s to slowly wake up. but yes, if not 40 to 70 is the range on bank failures over there.

  10. NoTribe Says:

    sam, I was noticing that to on the VX and its 50 day ma. I bought puts on VXX and FAZ on Tue, so am not really on the knife’s edge here. More like a comfort zone of holding a gain, and wondering if it will get much larger. Only that late sell action saved the VIX from breaking below, and that had all the marks (AMZN led) of mere profit taking.

    So I am betting that VIX goes much lower by Dec. But I’ve a much larger bet that FAZ goes lower by Jan.

    As for Europe, I think its been overplayed. A bit like the boy crying wolf (impending doom) every Thursday to Sunday for what, the past 3 months?

    Earnings, and on the tech side at least, are going to overtake the story line for Oct & Nov, and they will be stellar.

  11. NoTribe Says:

    Also, just from my take of around the web– the majority seem on the sidelines.

  12. jeff pierce Says:

    which means a big move is likely coming one way or the other as everyone rushes back in.

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