Friday 18 December 2015

VIX climbs into the weekend

With US equities closing significantly lower, the VIX opened higher, and held gains into the weekend, settling +9.3% @ 20.70. Despite Thurs/Friday gains, the VIX saw a net weekly decline of -15.1%, as interest rate uncertainty was finally removed.


VIX'60min



VIX'daily3



VIX'weekly



Summary

*for those watching the intraday VIX action, there remain sporadic 'rogue prints' as I call them, with one this afternoon to 23.30. This has been a major problem at times, and VIX traders should remember how the VIX didn't even post a print until 9.55am on Aug'24th.
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So... two consecutive days of gains, but still a net weekly decline. Why?

Well.. with the interest rate issue out of the way, the market has seen one of its long standing aspects of uncertainty removed. Clearly, there will be increasing concern about a second rate hike in the spring, but for now... volatility will be lower than it otherwise would be.

Underlying MACD (blue bar histogram) on the big weekly chart is now positive cycle, but there is high threat of a divergent lower high in the near term.
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Best guess... renewed cooling to the low teens into early 2016. From there though, unless the equity bulls can push to a new high in at least some indexes, the market is going to see an epic rollover. If that is the case... VIX will push into the 30s in Feb/March.

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more later... on the indexes