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Volatility: Yesterday we wrote:
“The message from $VIX $VXN is bullish. In fact, $VIX $VXN both had a very sharp big drop at end of day today. This was very disheartening for traders who are long volatility. This sharp drop though is not an indication that Surge4 is going to just keep rising by a huge amount. This sharp drop is actually the first in a series of complex moves by $VIX $VXN to build an under-the-hood setup to rise back up.”
The move has started on the intraday charts for $VIX $VXN. We are likely going to see some unpredictable intraday swings by $VIX $VXN over the next few sessions. But basically, we are going to see them bounce around in these zones:
$VIX: 13.91 - 16.03
$VXN: 18.21 - 20.42
While $VIX $VXN do their funky dance moves up and down in these zones, $SPX $NDX $RUT are likely to keep rising. And then at some point next week, $VIX $VXN will be ready to spike as Surge4 ends and Dip4 starts for $SPX $NDX $RUT.
The rest of this article covers:
Surge4: resistance levels
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