VIX: Hit the Trade War highs. Cyclical decline starting.The CBOE Volatility Index (VIX) which measures the market's expectation of 30-day forward-looking volatility, has almost hit last Friday the highs (50.30) of the U.S. - China trade war in
February 2018. Going further back on the time line, the 53.30 high of VIX during China's economic slowdown fears in late August 2015, isn't far off either.
Today's lower opening was a natural response but even then the index remains overbought (RSI = 80.163) and when it does it is historically unlikely to stay that high for low. We are expecting a strong decline back to the ease levels of 12.75 - 13.30 in around 2 months. As you see on the chart and the last two highs, this is a cyclical process of VIX and the occurence of the next shock event can even be timed. Regardless of timing, the current VIX levels present an optimal sell opportunity.
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