iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
23,417 Blog Posts

Chartfags Get in Here: Is the VIX Fixing to Break Out?

I know some of you non reading types have gone through great lengths to learn about geometrical formations and how it might help predict the future for stock prices. Well, explain this now, will you?

The god damned VIX is fixing to bust loose — taking with it any semblance of normalcy you won’t thought you had. North Korea to wipe out California from the map, forever fucking democrats into an electoral jambox? Possibly.

However, following the revelations that some deep pocketed lunatic is idly tossing tens of millions at VIX options contracts, one should be alert of chicanery of the first order.

So pray tell me, Chartfags, what do you see in this here chart?

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26 comments

  1. steveplace

    you can’t use traditional technical analysis on the VIX because the VIX is not a stock.

    stop it.

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    • Dr. Fly

      Tell that to charfags. They’ll instruct you of your wrongness.

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      • probucks

        Technical analysis works on VIX.

        U just can’t be retarted with it and start drawing all types of weird patterns.

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        • tonka

          It works in the sense that it’s the most predictable product out there. Doesn’t matter where it is currently, it’s going back to 12. Just try not to get blown up in between.

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        • sarcrilege

          hindsight 20/20 pattern recognition in the world of stock markets rigged by central banks is retarded to begin with…unless one is a chartfag

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          • tonka

            When did this rigging start? I’m assuming some time before 1985, cuz every VIX spike has looked pretty darn similar.

            Is it wrong to assume every VIX spike going forward will be similar in order to make money off it?

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        • probucks

          VIX responds to gap-fill targets, timebased projections, and long term resistance levels.

          It’s also a “trending” product and the supply/demand factors of near month futures leads to useful observations.

          All of the above are tools of technical analysis.

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  2. roundwego

    Complacency is off the charts. And rates are going up as creative destruction is welcomed by the elite.

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  3. mushroomz

    Fiddling with harmonic knobs, the TLT chart looks bullish, and could break out, temporarily sending equities down a flaming zinc mine shaft.

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  4. tonka

    There was a time when people bought the 30 calls, regardless of where the underlying index was at. Month after month, the 30 calls would be in the top 10 highest open interest. Until it wasn’t. Now it’s 50 cent. This is what happens when you data mine a limited sample.

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  5. steveplace

    The other thing you need to consider is how the VIX relates to the ACTUAL VOLATILITY of the S&P 500.

    So the VIX is trading at 13%. Is that high or low?

    Well, what’s the one month historical volatility of the market?

    7%.

    That means we’re sitting at a 6% premium right now. Historically, that’s about as normal as it gets.

    Now *can* the VIX rip? Sure. We’ve had 100 consecutive days without a VIX reading over 15%. But you won’t find any predictive nature on a “breakout” level.

    In fact, you can use the obvious breakouts to fade and start shorting VXX.

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  6. roundwego

    Rut has been flat since dec. Oil is breaking down

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  7. matt_bear

    when it spikes it spikes hard. 50 cent is trying to make a fortune front running this…by losing millions trying.

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  8. gappingandyapping
    gappingandyapping

    VIX is going to zero, buy $XIV

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    • peaches

      Not now though. Sold this morning. Been long XIV since december. Something is coming.

      XIV is gonna get real cheap.

      Going long any VIX etfs is stupid though.

      Better to short market, even better yet go long gold or silver or 30 years

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      • sarcrilege

        go long only phyz gold/silver; not paper etf

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        • peaches

          Right… because the entire financial system is going to collapse, and the jew overlords will close my account and I wont be able to take home my winnings?

          I’ll take that risk rather than buy 100s of ounces of silver at a premium and then sell them for less than spot.

          Retarded idea.

          If the shit hits the fan and the financial system collapses…

          I’ll rebuild computer networks and get paid in silver and gold or beef or whatever by the unskilled and newly impoverished former billionaire class.

          Sounds like a party.

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          • tonka

            Nah man, I totally know how an end of the world event that has never happened will play out. Gold and silver…how could it be anything else?

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  9. BenCBrainard

    I see lots of up and down bars.

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  10. steveplace

    ALSO

    The “50 cent” trader isn’t being reckless. It’s cheap convexity hedges for a customer who has serious bullish size on.

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    • peaches

      Why not reduce your bullish position and hold cash… instead of holding a position that constantly loses value in a flat market?

      Hedging only makes sense if both vehicles are going up in the long run.

      Bonds and stocks for example.

      If you are too long, you’re too long.

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      • tonka

        Tell that to the guy running a VaR model on a fund that has a cap on how much cash they can hold. There’s a lot of evidence that rolling VIX options is a better hedge than rolling SPX puts…which isn’t saying much…but people come up with all sorts of things that would have performed brilliantly over the last 10 years, even if they lose money 90% of the time.

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      • steveplace

        Right now, because the VIX is low, and has been persistently low…

        and because the SKEW of VIX options is low…

        It means that buying VIX calls is very inexpensive. Much less expensive than eq hedges.

        And if you’re a fund that has a MANDATE to be long XX% then you can’t just bail on your positions. You also don’t have the liquidity to do that either.

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  11. masteroneass

    I don’t need a chart to tell me volatility is going to spike, which it will. I flipped my lucky quarter – I mean 50 cent piece. Friendo

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  12. bob smith

    That chart is clearly developing into the classic BUTT formation. When it completes, VIX will be ~ 26, California will be all sand (extra Kim Jong-un) and with any luck, Arizona will be incidentally destroyed. That will solve 3/4 of our Illegal Immigration, Social Security, Medicare, Pension and AARP-whining problems all in one giant mushroom cloud.

    Only downside is the collateral damage to the endangered spotted owl which will no longer be endangered since it will no longer be.

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