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
