Volatility – Weekly Analysis

The storm arrived. Right on schedule. Just a week ago, in our VIX Monthly Report, we warned: “But the second half of the week could become considerably stormier.” And added something equally important: “Overall, VIX is closer to neutral in the short and mid term, but neutral does not mean calm. The long-term outlook, unfortunately for the bulls, is bullish.” Well, both warnings materialized. The second half of the week delivered precisely the turbulence we anticipated. Once again, the technicals spoke before the headlines caught up. But now comes the more interesting question: Was this just the opening act, or has the storm already spent its energy? Let’s see what the weekly candles and indicators are telling us. They warned us about the storm. Perhaps they can also tell us what comes next. CANDLES We remember that the S&P 500 Volatility Index closed September with a rather rare Bullish Engulfing…