Monday, June 16, 2014

$VIX seems to be going up

Here's your VIX:

VIX normally goes down slowly and up quickly. Usually it can even spike +3SD a few times. That's usually the only time you want to short VIX. Blowing up thru the SMA(50) would mean more excitement to come!

Here's its futures curve:

You also generally only want to short VIX when the curve is inverted. Because if you buy it here, and then it inverts while you're holding, you get your ass handed to you.

The way this is behaving right now makes me think that, despite the imminent danger of very good Q2 economic numbers from the US, the market is going to take a pause and churn for a while. People probably need to get more scared than this.

BTW, I wouldn't ever go long VIX, even if you offered to set me up on a date with Lana del Rey. Going long VIX means going long a fast-decay option and going long irrational emotion.

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