The Option Pit VIX Light Is Red, And Volatility Is Likely To Drop.
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The dollar may be in dire danger as we stare down the barrel of a digital currency arms race …
Will you be caught unprepared … or will you be ready to profit?
Back to the VIX …
Coming out of a weekend, we often expect the VIX to be up.
And on Monday, it was … for most of the day …
But then as the market rallied higher to end the day nearly unchanged, the VIX also managed to get to even on the day.
There is a lot to unpack about the VIX trading Monday.
And while volume was slow, there were a few clear signs of what the VIX is doing next.
Here is what I saw.
Coming out of a long weekend last week, for the VIX to close unchanged, effectively means it went down.
I explained why in this post that I highlighted last week.
But that is not the only interesting tidbit.
The VIX has now closed below 17 for two days in a row.
It did this once in April …
And that is the ONLY other time since the start of the pandemic:
Additionally, the VIX closed flat (essentially down) on a day where the S&P 500 (Ticker: SPX) was actually down on the day.
Yes, it was only down three points, but lately any down move in the S&P 500 has meant a VIX rally …
Not this time.
SPX movement has collapsed in the last 10 days:
It is now approaching lows for the year, and who knows? It could go lower.
So what does all this mean?
Add in all those July puts I discussed in Monday’s post, and I think we have a recipe for a full-scale VIX collapse.
I’m calling it now … I think we will see the VIX trade near 15 this week.
June expiration next Wednesday is set to be the lowest since the pandemic, unless a shoe NO ONE currently sees coming drops …
I would be playing VIX June 15, 16, and 17-strike puts leading into Friday.
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