Tuesday, 19 January 2016

VIX cools a little

Whilst US equity indexes closed very mixed, the VIX saw moderate swings across the day, settling -3.6% @ 26.05. Near term outlook offers the sp'1940/60 zone into the next FOMC (Jan'27th), and that should equate to VIX 20/18. Broadly.. the 40s are extremely probable by early spring.




Suffice to add, relative to the ongoing equity weakness, the VIX arguably remains subdued.

Keep in mind, when sp'1867 in Aug'2015, the VIX exploded to the low 50s. Of course, that was largely due to the style of price action, but still.. it is surprising to see VIX broadly stuck <30, whilst most equity indexes have now broken below the Aug'2015 low.

What should be clear, whether its a few weeks, or a few months, VIX 40s are coming. The only issue is whether the style of price action is dynamic enough on the downside to briefly merit 50s.. or even 60s.

*I am looking to be long VIX next week, probably via TVIX, somewhere in the $7/6s.

more later... on the indexes