The Option Pit VIX Traffic Light Is Yellow: Volatility Will Move Wildly.

Hey Traders,

Well, it happened …

The Consumer Price Index (CPI) numbers were released … and markets did not like what they saw.

As I write this, the S&P 500 (Ticker: SPX) is down more than 2.5% … 

And the VIX is up more than 2.5 points, teasing a break of the 29-handle.

Meanwhile, the Option Pit VIX Traffic Light has turned yellow.

Which way will we go next?

Right now, I think we are much more likely to see the Option Pit VIX Traffic Light go green than go red again.

Yes, I believe that the worse-than-expected CPI numbers mean we are likely to see vol jump higher …

But how high?

I think we definitely could hit the 30-handle.

Remember how the VIX of VIX, VVIX, has been hitting new multi-year lows for quite a few days in a row?

Well, no more.

VVIX is back above 100 …

And the VIX futures curve has really tightened up, and is looking rather flat.

I think markets will continue to react.

And the VIX will head to 30.

There are trading opportunities out there … but this is a prime example of why it can (literally) pay to hedge your bets …

Your Only Option,