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Tuesday, July 25, 2023


 Since CNBC likes to report a lot of fake stats (as I pointed out in yesterday's blog); I thought I'd reveal a real historic move we're seeing on the $VIX.

What is the $VIX? The VIX Index is a calculation designed to produce a measure of constant, 30-day expected volatility of the U.S. stock market Source 

The $VIX predicts future volatility, by monitoring the options market, but more and more the $VIX is continually beaten down on a daily, weekly, and monthly basis, in order to ensure that the bullish Options pay. Of course when the market is made up of 90% bulls, it's quite easy to overpower the bears, and especially during periods of light volume, as we've seen again this summer. 

Does this mean the $VIX is broken? In a way it does... but I prefer to call the $VIX rigged, in that it's continually broken, on purpose, yet it is also allowed to occasionally run; in order to cause panic selling, and reset the options market. 

For Example: Think back to the Trump crash (AKA the Covid Crash). The $VIX was allowed to run for exactly 1 month - from the end of  February OPEX, until March OPEX (precisely). Also notice the setup - seen on the chart below - for the previous 3 years. 

I'm convinced the whole crisis was staged in order to help get rid of Boris Johnson, and Donald Trump, just as 9/11 was used for nefarious purposes.

 See: Unusual Options Market Activity and the Terrorist Attacks of September 11, 2001. introduction 

Jon Najarian is mentioned in the above article, as a someone who concluded - from the trading activity - that someone knew that 9/11 was going to occur.  

I wasn't actively trading during the time of 9/11, but it's a fascinating study!  


$VIX - Monthly Candlestick Chart - 16 year view - The $VIX continues to trade below the 48 level for the longest run since 2015. 

Yesterday, I incorrectly stated on twitter that the $VIX had stayed below 50, for the same length of time, but on closer inspection, 48 was the actual pivot in 2011.

If you look at even longer historical $VIX charts 45 was the magic number, but it seems that over the more recent past higher levels of volatility have become the norm. We're also seeing a crisis that requires larger amounts of liquidity to reflate the bubble, and we seem to be overdue for one. 

No doubt the $VIX will once again be allowed to break above the 48 level, but if history is a guide, it may not be until early next year, in 2024. 

Market Update: 

Turns out the long awaited $NDX rebalance was much to do about nothing! 

This morning we see money flow back into the tech sector. I saw this coming a mile away. 


Take care, 


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