The VIX has remained low after its wild ride for weeks in an expanding triangle. VIX options settled this morning, at slighy under $21, and check out this video about traders' expectations for where it's headed next. It's from the CME Group via OptionMonster, something I re-tweeted earlier today. Here's my re-tweet message, you can click the YouTube link to view the information:
- UnbiasedTrading RT @mrtopstep RT @optionmonster: Dec VIX print on today's Sonar Report http://www.youtube.com/watch?v=E-TXT5lSp3Y _ about 7 hours ago
And here's a look at the VIX, daily and weekly charts, below. Looks like positive divergence on both - which would support the idea that the VIX will move up again, even if it doesn't happen until after this year actually closes.
The weekly shows that VIX has gotten support at a prior pivot area where a sort of triangle had formed in earlier 2008. Assuming it does proceed upward, it should encounter resistance at or around the low $30's, so I'm reluctant to project $40 so quickly. Won't rule it out but don't want to count on it either, not for January. But I can agree with the idea that the VIX isn't so likely to remain this low for very long. Give it some time - while something could happen, there are reasons the the markets to remain fairly stable for the rest of this month. The SPX would have to break 1100, 1090, and really 1082 to get seriously going to the downside.
P.S. - added note: If there's a valid, bullish inverse head and shoulders setting up in the VIX, then it may actually point to at least 30 or over - another consideration to add to the VIX mix.
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