VIX HEADFAKE

 

VIX broke its trend line from the March lows on Friday, falling below 1240 and hitting 1199.  This quickly recovered on Monday as the VIX traded back above this trend line, creating a headfake. Thus far, this head fake has led to a squeeze back to retesting 2 week resistance at 1400.  Pullbacks down to 1240 now offer new support based off this 1199 low and a weekly close above 1340 is bullish. Earlier this week, SPY Implied Volatility was 10.16% vs Historical Volatility of 11.73%, according to a 30day average from IVolatility.com. 

RISK DISCLOSURE: PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. THE RISK OF LOSS IN TRADING FUTURES AND OPTIONS IS SUBSTANTIAL AND SUCH INVESTING IS NOT SUITABLE FOR ALL INVESTORS.  AN INVESTOR COULD LOSE MORE THAN THE INITIAL INVESTMENT.