Volatility

Before we had this pull back I assumed that the VIX would fluctuate in the teens. I thought eventually we would start tracking the historic tendencies. But yesterday’s move suggested to me that the 20 level on the VIX is likely to be support and 28-30 is likely to be extreme resistance. That is how I will play the volatility going forward, low 20 long Vega, high 28-30 short Vega.

Yesterday’s post was about the overhead downtrend line that is now in place. To go a little further with that, for my opinion to change these criteria need to be met. First, I would like to see a close above the red channel line at the 1,115 level. Second, volumes would have to increase to over one billion positive up/down.

As far as trades go, I have been setting condors for April and I’m still setting credit spreads for March.