All VIX explosions since the 2008 crash followed a "small A-B, big C pattern". The duration of Wave C was approx. 1 month most of the time, except in 2008, when it took 2 months to unfold.
There are still two Fed cycles before the Chinese New Year, so a big move in VIX and other instruments in Nov-Jan makes sense, followed by a pause in Feb.
And so, while VIX will be skyrocketing a new all time high, I do think that my Grand Correlation scenario is about to become very real:
1) Base pairs should go down, GBP below 1.10, USDJPY below 90.
2) EUR crosses should go down by ~10%,
3) EURUSD is pushed below 0.90 as a result of (1) and (2),
4) Treasuries down (TLT near 100),
5) Stocks down (SPX -50% or more),
6) Crude back to 10.
Nothing like that happened in the last 40 years: if stocks go down, then Treasuries should go up... But not this time, folks )
There are still two Fed cycles before the Chinese New Year, so a big move in VIX and other instruments in Nov-Jan makes sense, followed by a pause in Feb.
And so, while VIX will be skyrocketing a new all time high, I do think that my Grand Correlation scenario is about to become very real:
1) Base pairs should go down, GBP below 1.10, USDJPY below 90.
2) EUR crosses should go down by ~10%,
3) EURUSD is pushed below 0.90 as a result of (1) and (2),
4) Treasuries down (TLT near 100),
5) Stocks down (SPX -50% or more),
6) Crude back to 10.
Nothing like that happened in the last 40 years: if stocks go down, then Treasuries should go up... But not this time, folks )
