The Battle of the VIX 7/27/2020

VIX at the 4 hour view.

According to the market internal data, liquidity is pretty high. So high that it's drowning volatility as well as permabears' accounts. As stated before, last week's pullback ran out of time.

Pullbacks will be limited for a few days. That said, the VIX refuses to go below 23. Why? It's because there are so many calls over puts that the VIX recognizes this as either a multi-day buying climax or buyers getting exhausted. Furthermore, the VVIX (implied volatility) is warning that the VIX is not done yet.

The green lines are the minor and major supports for the VIX. It will try to find support at most likely the second or third green lines. That blue line is the wedge resistance. If the VIX decisively breaks that wedge resistance, then prepare for a bigger pullback than last week. Last week's pullback was stopped when the VIX couldn't break through that wedge. Judging by the price action, the VIX wants to break above the blue line.

Time is starting to run out in the VIX. The wedge should break next week. It's possible that the wedge may break as early as this Thursday... which is coincidental that the Fed's presser is this coming Wednesday.

Frankly, I want this wedge resistance to break so traders can have more opportunities again. To an investor, volatility is a nightmare. To a trader, volatility is opportunity.