Are We Past The Peak Of Fear?

The VIX Light is Yellow: Volatility Is Going To Move Wildly.

Hey Traders,

The S&P 500 (Ticker: SPX) had a strong day on Wednesday.

On Thursday, it opened lower …

But as we head into Triple Witching I am noticing a trend this week in the VIX.

What does it mean?  Where are we going next?

Here are your answers …

Headed For A Reversal?

The S&P 500 is down about 20 points as I write this…

The VIX is only up about 0.57 …

As for VIX ETPs and VIX futures … they are barely moving.

What is going on?

Let’s look at the S&P 500 and the VIX:

As you can see, even as the S&P 500 has been flailing over the last few days, the VIX is well off its top.

I think we are past the peak of fear …

As we head into Triple (or Quad) Witching on Friday, we are setting up for a big reversal.

I would not be surprised if the market rallies throughout the rest of the day with potential follow-through tomorrow.

I’m looking at cheap SPY calls that expire tomorrow. I am also looking at VIX and ProShares Ultra VIX Short Term Futures ETF (Ticker: UVXY) as potential volatility fades.

Your Only Option,

Mark Sebastian

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