Volatility still set to explode

With the morning gap higher on the indexes, the VIX quickly fell 5%, but then briefly went green as the indexes all fell to pieces. The latter day index rally again saw the VIX fall almost 7%, before a moderate recovery into the close.


VIX'60min

VIX, daily, rainbow

VIX, weekly

Summary

The VIX has formed a nice base in the 15s, and has already passed the first target of 20.

Bears should look for VIX to break 21 either Thursday or early Friday. A break of 21 opens a fast move higher to around 24/25.

The mid-term outlook remains VIX 35/40, with sp'1225/1170.

More later.