Volatility - building a floor

The main indexes are still bullish on the daily cycles, and it is true the VIX daily chart is still bearish, yet we're probably very close to the floor in the VIX. I'd be very surprised if we break new index highs sp>1422, and I can't envision a VIX in the 12s. No way. Not unless the Bernanke announced QE3, and frankly, we're done with that argument until mid August at least.


VIX'60min

VIX, daily

VIX, weekly

Summary

Forming a VIX floor can be a real messy affair, so even if we see some sort of leap higher tomorrow to the 20.0 level, there is still likely to be a pullback of 5-7% within a day, if not hours.

It remains the case there is still very high possibility of the VIX exploding into the 30s and 40s within around 2-5 weeks.

VIX 'call protection'...is super cheap right now.