This is what my crystal ball tells me now. The VIX is down another 3% today, and is even farther below its lower Bollinger Band. VIX call options, however, are now more than ten times the price of the equivalent puts for Jan 18 and similarly priced for Jan 25. That is a very extreme condition. It suggests the VIX is near a bottom here, and it could be setting up for a strong bounce. And, a bouncing VIX usually goes along with a falling stock market.
So, I'm sticking to my position… any gains in the market from here are likely to be given back in the days ahead. The way VIX futures are suggesting is like a flash crash in the works in just a few days, probably as early as Tuesday or Wednesday next week.
With that, I'm going really aggressively in adding my shorts today, so much so I have even shorted QQQ and TQQQ naked. Of course, I've given myself sufficient time for such risky trades but I'm confident this is the right thing to do in such a ridiculously overstretched market.
Look out from below if you are chasing this market now!
No comments:
Post a Comment