I've never seen so many false signals before. VIX was absolutely impulsing up, and then stopped suddenly. Selling volume on the indexes was big, the Italian election surprised the market, and we still face sequester. The almighty Bernank rescued the market for now. Have to take quick profits when you have them long and short. I thought for sure VIX would be making new highs this week, I was wrong. Who knows how long this will continue, but I do believe the market is overestimating QE, and underestimating the fallout from the sequester which is only the beginning of our government's debacle.
Sequester is hugely overhyped. Won't make much of a dent in GDP. If you're counting on that to spike VIX I think you'll be disappointed. In any case, VXX will be $10 or less by the end of this year no matter what it does in the interim.
Doesn't seem that overhyped anymore does it? Seems insignificant. Nice megaphone pattern playing out on the DOW. That will be good for volatility. Who cares about the end of this year? Big money is extremely short term now. Play the weekly options.