📌 Working in public has given us a live example of Volatility expanding in times of a crisis.
Here it is usually a swing recap for those following. As you will remember we made good use of the initial tempo in the retreat:
The show must go on... in came buyers with the counter attack and no surprises on the timing, covid was simply the trigger.
To save the overshoots, we cleared all and even covered some at the 85 highs.
📌 When a deep retrace came into play it has created enough energy for a slingshot.
Buyers of volatility are quite happy to exchange here at the lows as they are in full control and holding the bid at 🔑 support. Sellers of vol and the 'everything is back to normal crowds' will be condemned to liquidation. This wave 2 attempt at breaching support which has miserably failed today is a visual example of pinning your opponent.
The key point is liquidations. Global Equities are complacent, retail have bought as much as they can. Large hands have cleared, since the Covid chapter II irritates them (from a retracement perspective at the very least). And it will comedown to a massacre in VIX... Seriously it is just as well we are seeing the back of VVIX...that really was a monster.
📌 How and Why these slingshots occur in VIX?
When major forces on both sides clash together, it comes down to an exchange. In this case the health crisis cannot be solved via the monetary or fiscal side, shutting down the economy has caused long term repercussions. Especially with the elderly and overshoots on dependencies.
In simply terms the older demographics will be forced into using savings to support families, businesses will be more defensive with capital, the issue is not solved with stimulus, it is solved with CONFIDENCE. The policy mistakes here are off the charts and may even cost Trump the election.
As usual thanks for keeping the feedback coming 👍 or 👎
Here it is usually a swing recap for those following. As you will remember we made good use of the initial tempo in the retreat:
The show must go on... in came buyers with the counter attack and no surprises on the timing, covid was simply the trigger.
To save the overshoots, we cleared all and even covered some at the 85 highs.
📌 When a deep retrace came into play it has created enough energy for a slingshot.
Buyers of volatility are quite happy to exchange here at the lows as they are in full control and holding the bid at 🔑 support. Sellers of vol and the 'everything is back to normal crowds' will be condemned to liquidation. This wave 2 attempt at breaching support which has miserably failed today is a visual example of pinning your opponent.
The key point is liquidations. Global Equities are complacent, retail have bought as much as they can. Large hands have cleared, since the Covid chapter II irritates them (from a retracement perspective at the very least). And it will comedown to a massacre in VIX... Seriously it is just as well we are seeing the back of VVIX...that really was a monster.
📌 How and Why these slingshots occur in VIX?
When major forces on both sides clash together, it comes down to an exchange. In this case the health crisis cannot be solved via the monetary or fiscal side, shutting down the economy has caused long term repercussions. Especially with the elderly and overshoots on dependencies.
In simply terms the older demographics will be forced into using savings to support families, businesses will be more defensive with capital, the issue is not solved with stimulus, it is solved with CONFIDENCE. The policy mistakes here are off the charts and may even cost Trump the election.
As usual thanks for keeping the feedback coming 👍 or 👎
