We’ve talked about a VIX breakout from it’s massive wedge pattern for over a month now. We even had two posts about it back in early August:
Volatility Index VIX Making A Come-Back?
Option Volatility Skew Charts
Overall we have been pretty good about forecasting it’s direction but right now we are stumped (honestly). It’s rare you find a site that will tell you that we DON’T know where it could go. The big reason we are so confused with the VIX right now is because we are bottoming in the markets (or at least we think so). If we bottom out on the SPX then the VIX could actually head much lower AND given that we don’t see the SPX selling off hard anytime soon we can’t image a big spike in the VIX either. We are in a pickle.
Our gut tells us that the VIX could get higher but it might take until the end of the year at the earliest.
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