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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