VIX: Should Take a Little Break for a Bit Before Surging HigherWe have seen immense volatility as of late and in the near-term I believe the VIX will take a little bit of a break. Its beginning to look overbought, 'toppy' and like a flat top.
The VIX is approaching a double-top met back in the 08/09 financial crisis and its highly unlikely it breaks this high without retracing down for a little before gathering the momentum needed. Its almost unheard of for a double-top to be broken on the first try, but rather it takes 2 or 3 tries before it can break (not just for volatility, but stocks and anything in general).
While I do believe it is only a matter of time before the VIX actually breaks into the 80s and 90s, I believe in the near-term we could expect the VIX to retrace to the low to mid 50s.
This is an extremely hard call to make given the fact that any piece of news can pop out of nowhere and can change technicals completely, but at this time, I would sell volatility for profit and rebuy in the low to mid 50s which will happen at some point this week.
- zSplit
