Battle of the VIX Continues 7/28/2020
已更新
VIX at the 4 hour view.
It seems that my second support was off by 0.2 points. Close enough.
The VIX is trying to fight back after reaching a medium-term support. It's projected to break that wedge no later than 08/05. It's more likely that the VIX will break the wedge earlier than that. If I were to guess, this Thursday or Friday would be a good catalyst. That's after the Fed's press conference tomorrow.
The VIX is primed for a jump. The issue is that liquidity is still very high. So, other factors need to work in order to counter that liquidity. High liquidity means stronger supports on the ES. If there is a "sell the news" event after the Fed's press conference, then the DXY or dollar strength also has to bounce hard. That deflation could counteract the higher liquidity levels.
I am definitely not expecting a March 2020 crash. However, given these conditions, this may be Part II of last week's pullback. What leads to me to believe that a pullback is imminent is that we are near the end of this wedge, the VVIX is well above 105, and the ES is in a bear flag pattern.
If this pullback finishes to the 3100 levels, then that may provide some great opportunities for oversold bounces. However, if the ES breaks 3090, then there may be more downside ahead. The chances are that the high liquidity would prevent that major support from breaking. I wouldn't go short next to a major support myself.
It seems that my second support was off by 0.2 points. Close enough.
The VIX is trying to fight back after reaching a medium-term support. It's projected to break that wedge no later than 08/05. It's more likely that the VIX will break the wedge earlier than that. If I were to guess, this Thursday or Friday would be a good catalyst. That's after the Fed's press conference tomorrow.
The VIX is primed for a jump. The issue is that liquidity is still very high. So, other factors need to work in order to counter that liquidity. High liquidity means stronger supports on the ES. If there is a "sell the news" event after the Fed's press conference, then the DXY or dollar strength also has to bounce hard. That deflation could counteract the higher liquidity levels.
I am definitely not expecting a March 2020 crash. However, given these conditions, this may be Part II of last week's pullback. What leads to me to believe that a pullback is imminent is that we are near the end of this wedge, the VVIX is well above 105, and the ES is in a bear flag pattern.
If this pullback finishes to the 3100 levels, then that may provide some great opportunities for oversold bounces. However, if the ES breaks 3090, then there may be more downside ahead. The chances are that the high liquidity would prevent that major support from breaking. I wouldn't go short next to a major support myself.
注释
Well, my projected date range was 7/30 to 8/4 for the next pullback. I thought it would be 7/31 after big tech earnings. I guess I was off by a day.
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